THE SENATE

The Hon. the Speaker pro tempore: Honourable senators, I
wish to draw your attention to the presence in the gallery of Julie Jo and Hope
Caldi. They are students at the University of Toronto, here at the invitation of
Senator Martin today as part of the University of Toronto's Women in House
program.

On behalf of all honourable senators, I welcome you to the Senate of Canada.

Hon. Senators: Hear, hear!

[Translation]

The Hon. the Speaker pro tempore: Honourable senators, I
wish to draw your attention to the presence in the gallery of Christophe
Blanquie, a special emissary from the Senate of France, who is here to look at
and learn about how we use stenotypists and our transcription and editing
methods.

Hon. Michael L. MacDonald: Honourable senators, the Convention on
International Trade and Endangered Species of Wild Fauna and Flora, CITES, was
finalized on March 3, 1973. This year marks its fortieth anniversary. To
commemorate the occasion, March 3 was designated by the General Assembly of the
United Nations to be the first World Wildlife Day. In its resolution, the
General Assembly reaffirmed the intrinsic value of wildlife and its various
contributions, including ecological, genetic, social, economic, scientific,
educational, cultural, recreational and aesthetic, to sustainable development
and human well-being, and recognized the important role of CITES in ensuring
that international trade does not threaten species' survival.

Raising awareness of the urgent need to step up and fight against wildlife
crime, which has wide-ranging economic, environmental and social impacts, has
never been more urgent. The illegal international trade in endangered species
continues to plague all of us, threatening the survival of some of Earth's most
magnificent animal species. Thousands of endangered elephants and rhinos are
slaughtered for their ivory every year, and, similarly, threatened top
predators, such as the big cats, are mindlessly killed for their body parts.

Canada is one of 170 countries that are signatories to CITES, and Canada has
shown leadership in the area of enforcement through our involvement with
Interpol, where we chair the Wildlife Crime Working Group. Canada also recently
announced $2 million in emergency funding to fight poaching and trafficking in
Eastern Africa.

This is commendable and should be acknowledged, but Canada has wildlife
challenges of its own. It is important that we set a good example here at home
to ensure that our words have credibility in all parts of the globe. In short,
we must practise what we preach.

Last month, Nova Scotians discovered that the Port of Halifax received 10
containers of fin whale meat originating in Iceland. It was shipped by rail to
Vancouver, destined for markets in Japan. The fin whale is a magnificent
cetacean, second in size only to the blue whale. It is also an endangered
species. The fin whale is also listed as a special concern on the federal
Species at Risk Act. Although there is a moratorium on the killing of these
animals, Iceland and Japan refuse to honour it. Both of these countries are
using Canada as a conduit for the trade of this endangered animal. Environment
Canada said, with respect to the shipment, that they had to allow it to proceed
since Iceland and Japan do not agree to the listing of the fin whale under the
convention. It also said that the convention provides an exemption for shipments
of endangered species in transit to a country so long as the shipment remains in
customs' control.

The ship that dropped off the containers in Halifax was destined for the
United States, but American law would not allow for the transport of fin whale
meat. So Canada was used to do the dirty work. Regardless of whether Canada
complies with the rules, the government should adopt stricter measures to ensure
it doesn't happen again. Canada's membership in CITES does not prevent it from
adopting firmer regulations or taking stricter domestic measures, including the
complete prohibition of the transport of these types of species. Canadians do
not want our country being used as a conduit for the flesh of endangered
animals. I strongly urge the Government of Canada to do a complete review of the
situation so that our country can make the regulatory and legal changes
necessary to avoid any future involvement in this odious commercial activity.

Hon. Catherine S. Callbeck: Honourable senators, I'd like to offer my
best wishes to all Canadian athletes who will be competing in the upcoming
Paralympic Winter Games in Russia March 7 to 16. I'm particularly proud that two
Prince Edward Islanders are making the trip to compete with their fellow
Canadians.

(1410)

Billy Bridges, who was born in Summerside, has been a member of the National
Paralympic Sledge Hockey Team since the age of 14. In fact, he was the youngest
player in Canadian sledge hockey history. Over the last 15 years, he has won
three world championship gold medals and three world sledge hockey challenge
gold medals. He has also competed in three previous Paralympic Winter Games,
winning a gold medal as part of Canada's team in Turin in 2006.

Mark Arendz, a native of Hartsville, is a member of the Canadian Para-Nordic
Team competing in both the para-Nordic skiing and biathlon. This will be the
second time he will have participated in the Paralympic Games, having competed
in Vancouver in 2010. Mark has been called a consistent threat on the World Cup
tour. Right now he is the reigning World Cup biathlon champion, as well as the
world champion in the 7.5 kilometre biathlon sprint.

I'd also like to mention Ryan McKenna from my community of Central Bedeque.
This third-year journalism student at Ryerson University has been hired by the
International Paralympic Committee to write articles for its website about
sledge hockey. He, too, will be in Russia, writing recaps of games and previews
of the next day's events. I wish him good luck in this exciting assignment.

Honourable senators, Canadians are rightfully proud of the athletes who
represent us so well on the world stage. They are shining examples of the
results of hard work and determination. Please join with me in wishing Billy,
Mark and all the Paralympians the best of luck in the Winter Games in the next
two weeks.

Hon. Norman E. Doyle: Honourable senators, I had intended to make a
statement on February 15, which was the anniversary of the sinking of the
Ocean Ranger. However, it was break week, which made it impossible to do so,
but I do think it's important to remember this terrible tragedy which continues
to be marked in my home province of Newfoundland and Labrador on February 15
each year.

Honourable senators, 32 years ago on February 15, 1982, tragedy struck on the
Grand Banks of Newfoundland. The oil drilling rig Ocean Ranger, with 84
people aboard, went down in heavy seas in the early morning hours of that
fateful day. As dawn broke on February 15, it became clear that not only had the
Ocean Ranger gone down with all 84 of its crew but 56 of them, from
Newfoundland and Labrador, were lost as well. "Loss to the sea" has been a
familiar refrain in my province since it was first settled by Europeans hundreds
of years ago, but this was the first major tragedy involving workers in our then
fledgling offshore oil industry.

The Ocean Ranger was cutting-edge technology for its day and was
generally considered to be unsinkable. The Government of Canada eventually set
up a royal commission to look into the disaster and, as the evidence and
testimony later revealed, the Ocean Ranger was a tragedy just waiting to
happen.

As a result of the Ocean Ranger Royal Commission, many improvements
have been made to offshore oil industry safety. However, some 27 years later, a
Cougar helicopter en route to our producing offshore oil fields lost oil
pressure in its main gearbox and crashed into the Atlantic, taking the lives of
all but one of the 18 people on board. Despite all the improvements in
technology, the North Atlantic is still a very difficult and dangerous work
environment, and hardly a year ever passes without the loss of life in our
marine environment.

Honourable senators, I'm sure you will join with me in expressing our sincere
condolences to the surviving family members of the Ocean Ranger disaster
and to the countless other families who, over the centuries, have felt the sting
of loss from the sea.

Hon. Mobina S. B. Jaffer: Honourable senators, on Thursday, February
27, we welcomed His Highness Prince Karim Aga Khan to the Parliament of Canada,
where he delivered a historic address to the joint session of Parliament, making
him the third non-sitting head of state and the first faith leader to be
afforded this honour.

As a proud Ismaili Muslim, this was a particularly special day for me and for
my community. His Highness's visit was not only a reflection of the strong
relationship shared between the Government of Canada and the Ismaili Imamat, but
also a reminder of the importance we must all place on values such as pluralism,
diversity, inclusiveness and tolerance, which truly define us as Canadians.

As members of Parliament, senators, distinguished guests and thousands of
others watching at home listened intently, our hearts filled with pride as we
heard His Highness speak of Canada in such high regard. In his address he
stated:

The sad fact behind so much instability in our world today is that
governments seem to be inadequate to these challenges. A much happier fact
is that in the global effort to change this picture, Canada is an exemplary
leader.

Honourable senators, although I'm very proud to be the only Canadian Ismaili
parliamentarian and to call myself a Canadian, and I will always be eternally
grateful to have been welcomed to Canada some 40 years ago, when my own country
of Uganda had abandoned me, I believe that there is still a great deal of work
that needs to be done for Canada to truly live up to His Highness's vision.

As I'm sure you are aware, there are many places in the world that are
currently facing political hardship and which desperately require our
assistance. I believe that the way we, as a country, respond to the current
crisis in the Ukraine, as well as the crisis in Syria, will act as an
opportunity for Canada to further promote values of tolerance, justice,
pluralism and mutual respect, which, as His Highness pointed out, are inherently
a part of the Canadian identity.

Honourable senators, I would like to conclude my statement by borrowing from
His Highness's wise words which continue to guide me in my work:

As you build your lives for yourselves and others, you will come to rest
upon certain principles. Central to my life has been a verse in the Holy
Quran, which addresses itself to the whole of humanity.

It says, "O mankind, fear your Lord, who created you of a single soul,
and from it created its mate, and from the pair of them scattered abroad
many men and women." I know of no more beautiful expression about the unity
of our human race, born indeed from a single soul.

Hon. Douglas Black: Honourable senators, last week I was pleased to
participate in the 2014 Australia-Canada Economic Leadership Forum, held in
Melbourne, Australia. I rise today to congratulate the organizers of this event
for their important contribution to developing a relationship between our two
countries. Thousands of kilometres may separate Canada and Australia, but no two
countries are more alike in terms of culture, values and institutions. I would
like to briefly share some of the highlights of the week's events.

Australia's Prime Minister, the Honourable Tony Abbott, opened the conference
with a focused and very frank keynote address. Other leading Australian
politicians and policy-makers were active participants as well, including the
Minister of Foreign Affairs, the Minister of Finance and the Governor of the
Reserve Bank of Australia. Canada was also well represented by our Minister of
Foreign Affairs, our Minister of Finance and our Governor of the Bank of Canada.
Both delegations were complemented by high-level participants from business,
academia and the cultural sector.

Matters discussed included the state of the global economy, the importance of
arts and culture in nation building, and the very complicated issues involved in
marketing natural resources to Asia. These are issues of tremendous importance
to both countries and, of course, to my province of Alberta.

Other important topics covered included a discussion of strategic and
military issues, infrastructure development, and how we can help our youth to
become more Asia-literate so they can be better equipped to engage with this
globally important region.

We, as senators, have the privilege and the responsibility to contribute to
dialogues such as these. Doing so enhances our understanding of Canada's
interests in the world and allows us to be more effective in our Senate work.

Hon. Richard Neufeld: Honourable senators, I rise today to
congratulate Denny Morrison of Fort St. John, British Columbia, on his strong
showing at the Sochi Olympics. This accomplished speed skater won Canada's first
long-track medal of the games when he won silver in the men's 1,000-metre event.
He followed that with a bronze-medal performance in the 1,500 metres.

Denny returned to Canada tied with Gaétan Boucher as the country's most
decorated male speed skater.

Honourable senators, the people of my community have followed Denny's speed
skating career from the beginning and have watched his success with great
interest and pride. In the 2010 Vancouver games, Denny finished thirteenth in
the 1,000 metres, and it was thrilling to see him finish in Sochi just four one-hundredths of a second shy of a gold medal.

We could not be happier to see this remarkable athlete win his individual
Olympic medals.

Honourable senators, his 1,000-metre win is all the more special because
Denny was not originally scheduled to race in this event. Unfortunately, a fall
during the Canadian qualifications in December prevented him from making the
roster for that distance in Sochi. However, just one day before the Olympic
event, his teammate Gilmore Junio gave Denny his spot because he felt he was the
team's best skater.

Some Hon. Senators: Hear, hear.

Senator Neufeld: When Junio announced that he was stepping aside so
his teammate could compete, he explained:

How Denny is skating now, I believe it's in the best interest of the team
if he races.

I commend Gilmore Junio for sacrificing his position for the greater good of
his team. In my opinion, his words and actions embodied the true spirit of the
Olympics and set an important example for all Canadians, especially our children
and future Olympians.

Honourable senators, I congratulate Denny Morrison, Gilmore Junio and all of
Canada's Olympians on their hard work and achievements at the Sochi Games.

The Hon. the Speaker pro tempore: Honourable senators, I
have the honour to table a revised version of the September 2012 Rules of the
Senate, updated to take account of the changes adopted on February 12, 2014.

The Hon. the Speaker pro tempore: Honourable senators, I
have the honour to table, in both official languages, pursuant to section 61 of
the Canadian Human Rights Act and section 32 of the Employment Equity Act, the
2013 annual report of the Canadian Human Rights Commission.

Hon. Yonah Martin (Deputy Leader of the Government): Honourable
senators, I have the honour to table, in both official languages, Parts I and II
of the 2014-15 Estimates for the fiscal year ending March 31, 2015.

Hon. Bob Runciman, Chair of the Standing Senate Committee on Legal and
Constitutional Affairs, presented the following report:

Tuesday, March 4, 2014

The Standing Senate Committee on Legal and Constitutional Affairs has the
honour to present its

THIRD REPORT

Your committee, to which was referred Bill C-217, An Act to amend the
Criminal Code (mischief relating to war memorials), has, in obedience to the
order of reference of Tuesday, February 4, 2014, examined the said Bill and
now reports the same without amendment.

Respectfully submitted,

BOB RUNCIMAN
Chair

The Hon. the Speaker pro tempore: Honourable senators,
when shall this bill be read the third time?

(On motion of Senator Runciman, bill placed on the Orders of the Day for
third reading at the next sitting of the Senate.)

Hon. Yonah Martin (Deputy Leader of the Government): Honourable
senators, I give notice that, at the next sitting of the Senate, I will move:

That the Standing Joint Committee on the Library of Parliament be
authorized to examine and report upon the expenditures set out in Library of
Parliament Vote 1 of the Main Estimates for the fiscal year ending March 31,
2015; and

That a message be sent to the House of Commons to acquaint that House
accordingly.

Hon. Yonah Martin (Deputy Leader of the Government): Honourable
senators, I give notice that, at the next sitting of the Senate, I will move:

That the Standing Senate Committee on National Finance be authorized to
examine and report upon the expenditures set out in the Main Estimates for
the fiscal year ending March 31, 2015, with the exception of Library of
Parliament Vote 1; and

That, for the purpose of this study, the committee have the power to sit,
Thursday, March 6, 2014 at 2 p.m. even though the Senate may then be
sitting, and that rule 12-18(1) be suspended in relation thereto.

Hon. James S. Cowan (Leader of the Opposition): My question, of
course, is for the Leader of the Government in the Senate. As he will know, as
part of our new approach to our work in the Senate, we've invited Canadians to
submit questions that they would like to have answered by the government. I can
say that the response has been immediate and encouraging. It shows that it's not
only parliamentarians who are looking for more information about the government
but that ordinary Canadians are looking for that as well.

The question that I want to pose to you today, sir, is provided by Sterling
Mancuso of Newmarket, Ontario. His question is this:

The proposed Canada-European Union free trade agreement is attempting to
covertly and radically alter Canada's copyright laws. Under the proposed
agreement, Canada would have to extend copyright protection by a further 20
years, to life of the author plus 70 years, up from the current 50 years,
which is already ridiculously long. The treaty would also allow corporations
to force Canadians to disclose their private actions on the Internet, under
the guise of copyright protection. Can the Leader of the Government in the
Senate explain why the Conservative Government is willing to give up
Canadians' right to a free Internet?

[Translation]

Hon. Claude Carignan (Leader of the Government): Obviously, the
decision to broadcast debates on the Internet will make it possible for this
person and all Canadians to listen to the answers that are given and to the
debates here in the Senate.

(1430)

As I have already said with respect to specific aspects of the free trade
agreement, we will have an opportunity once the document is finalized and
translated into 28 languages to get specific details from the text. This
agreement is historic and extremely important. It will create thousands of jobs
for Canadians and will give Canadian businesses access to half a billion new
clients. It will also open new markets across Europe to Canadian exporters, and
produce major spinoffs, jobs and opportunities for all Canadians. This agreement
is expected to create close to 80,000 new jobs and increase the annual income of
the average Canadian household by $1,000.

The agreement would eliminate 98 per cent of all European Union tariffs the
day it comes into effect and result in higher profits and more opportunities for
Canadian businesses of all sizes.

The main issues that were raised after the draft agreement was signed were
its effects on agriculture — supply management and cheese, in particular. Our
government has always protected the Canadian system relating to supply
management, cheese and other issues that directly affect Canadians. We will
continue to do so.

We will do whatever it takes to protect and promote the Canadian system with
respect to supply management and Canadian interests as a whole.

[English]

Senator Cowan: Well, I'm sure Mr. Mancuso will be interested to read
your recitation of the talking points, but I will remind Senator Carignan of the
question Mr. Mancuso has submitted, and I will repeat it, because the answer you
gave had nothing to do with the question that he asked. His question was about
copyright protection, and he points out that the agreement — and I agree that
the detail may not be all worked out, but the announcements which the government
made with such great fanfare made it very clear that the copyright protection
would be extended from its present life of the author plus 50 years to life of
the author plus 70 years. He's concerned about that.

He's also concerned about provisions in the Canada-EU treaty that would allow
corporations to force Canadians to disclose their private actions on the
Internet.

Those are the two questions he has asked. I'm sure he will be interested in
the other points you raise, but would you care to provide answers to those two
specific questions so he will have answers to those, and not just answers to the
issues you've chosen?

[Translation]

Senator Carignan: I understood the question. There was no need for you
to repeat it. I made it clear in my answer that the final texts are being
drafted. Twenty-eight languages have to be taken into account before we get a
legal draft. I would encourage you and everyone else who is wondering about
specific aspects of the agreement to wait until we have a legal draft of the
texts in all 28 languages. After that, we can discuss specific elements and the
specific impacts of such a technical issue.

Hon. Art Eggleton: Honourable senators, I am pleased to ask a question
that comes from Jordan Hill of Dundas, Ontario, to the government leader in the
Senate. He says the following:

The number of voters in Canada is in long term decline. Since the
demographic who vote with the most regularity are aging, Canada can expect
voter turnout to continue its decline. Why are young people disinclined to
vote? What is being done about increasing the likelihood of voting? Have
voting incentives been considered? Has lowering the voting age been
considered? Is internet voting been considered?

[Translation]

Hon. Claude Carignan (Leader of the Government): The elections bill
introduced by Minister Poilievre provides for a major overhaul. The bill is
currently being examined by the House of Commons. Various measures are being
taken to make voting more accessible. The government also took into account 38
recommendations made by the Chief Electoral Officer and incorporated them into
this election reform. Many of the measures proposed in this bill are designed to
make voting more accessible and increase voter turnout.

I therefore invite people to take a look at the bill and share their comments
with us if they think of any other measures that should be taken to improve the
election process. The bill is currently being examined by the House of Commons
and will then be sent to the Senate. Canadians' suggestions on how to make
voting more accessible are always welcome.

[English]

Senator Eggleton: Well, I think that bill is arguable in terms of
whether it's actually going to make it easier for anybody to vote or not. There
are a lot of organizations in this country who think it will be in the opposite
direction, but we'll examine that when it gets here.

Certainly your words will go back to Mr. Hill in terms of your response, but
I wonder if you have anything specific about any of the points he raises, such
as lowering the voting age and Internet voting. What is being done particularly
to encourage more young people to vote?

[Translation]

Senator Carignan: If you had the opportunity to examine the bill, you
would know that it does not include measures to lower the voting age. There are
other ways of encouraging young people to vote.

I invite Canadians to take a look at this bill, which is available online,
and to send us their comments and suggestions if they think there are ways in
which it could be improved.

Hon. Hugh Segal: My question is to the Leader of the Government in the
Senate. In view of the aggressive stance being taken by Russia with respect to
Ukraine and the angst now being expressed by Eastern European NATO members about
the safety of their borders in view of this Russian aggression, would the
government leader undertake to encourage the government on whose cabinet
committee he sits to (a) increase the complement of Canada's Armed Forces, and
especially our special forces and military intelligence; (b) speed up
procurement of ships and aircraft vital to Canada's global responsibilities; and
(c) set aside any procurement hypothecation or delay announced by the Minister
of Finance in his recent budget?

[Translation]

Hon. Claude Carignan (Leader of the Government): Thank you, Senator
Segal, for your question about this serious issue in Ukraine, which is currently
affecting the governments that are seeking recognition for Ukraine and democracy
throughout the world. As you know, we join our allies in condemning in the
strongest possible terms President Putin's military intervention in Ukraine.
This intervention is a clear violation of international law. It is a clear
violation of Ukraine's sovereignty and territorial integrity. Russia is clearly
violating international law. To respond to your question more specifically, as
we explained in Economic Action Plan 2012, Canadian Forces regular and reserve
force strength will be maintained at 68,000 and 27,000 respectively, over the
medium term.

(1440)

As for your second point, I want to point out that we recently announced the
new Canadian defence procurement strategy, which will provide our men and women
in uniform with the equipment they need at the best possible price for the
taxpayer, while maximizing the spinoffs for the economy and industries across
Canada. The policy or strategy will also streamline the defence procurement
process while promoting economic growth and long-term prosperity in Canada.

We are pleased that our strategy received the support of the Canadian
Association of Defence and Security Industries and the Aerospace Industries
Association of Canada.

As for your last point on procurement spending, as you know, since the
Department of National Defence was unable to spend the money this year, Economic
Action Plan 2014 will ensure that these funds remain available to the Canadian
Armed Forces over the coming years.

Need I remind you, as I like to remind our Liberal colleagues across the way
from time to time, that after a decade of darkness, we have made our men and
women in uniform a priority by increasing the national defence budget by 27 per
cent since 2006? We have made the largest investment of the century in the
Canadian Armed Forces. As Senator Segal knows, our government remains committed
to providing the women and men of the Canadian Army with the support, equipment
and training they need to fulfill their mandate.

[English]

Senator Segal: I have a supplementary question. I thank the Leader of
the Government for that clear and precise reflection of some of the compelling
facts about procurement in the past.

As he will know and colleagues will remember, we began the campaign in
support of NATO in Afghanistan with one mix of equipment and skill sets. We had
to augment that and make changes to that to ensure that our position in the
theatre was sustainable in terms of the best interests of the men and women in
uniform.

Can he share with us whether he is prepared to raise the issue of contingent
planning in the event that NATO decides that a line does have to be drawn and
that we are drawn away from the notion of avoiding military engagement — which
all Canadians want to avoid for as long as possible — so that there is
contingent planning going on so we know exactly where we have to go, what we
have to procure and what we have to engage should the present circumstance in
theatre require a joint NATO response, under which we would have our own
obligations to discharge?

[Translation]

Senator Carignan: Regarding the response and the actions currently
being considered in this matter, as you know, the Prime Minister remains in
close communication with his allied counterparts and has held emergency
meetings, particularly here in Canada. Canada is actively involved in the
efforts of various multilateral institutions to coordinate the international
response. Canadian officials have asked the Russian Ambassador to clearly convey
our message to Russia, and are reviewing all of our bilateral interactions. We
are therefore reviewing all of our ties with Russia in order to provide an
appropriate response to that country's illegal intervention.

[English]

Senator Segal: Could the government leader assure us that contingency
plans are in place in the event we have to expand our capacity? If he is unable
to assure us for reasons of national security, could he at least as a member of
various cabinet committees assure himself that contingency plans are, in fact,
in place in the event of a change in circumstance?

[Translation]

Senator Carignan: Clearly, before such decisions are made, all Cabinet
members must ensure that the decisions being taken are responsible and that they
can and should be enforced. I also understand that the honourable Senator Segal
has forwarded his ideas to Minister Nicholson in that regard.

Hon. Roméo Antonius Dallaire: One of these days you will get tired of
recounting the history of past decades and you will recognize that you have been
in power for at least eight years.

Early on, you were meeting the needs of the armed forces, because we were at
war. Not doing so would have been truly irresponsible. Since that time, all
procurement has stopped.

The Leader of the Government even has the audacity to say that National
Defence has not spent its budget and is currently absorbing these cuts. However,
that department was not able to spend its budget because the bureaucratic system
that the government has put in place makes it impossible for any spending to be
approved appropriately and in a timely manner.

Nevertheless, I want to get back to Senator Segal's question. Is it possible
that the government is looking at the future of the procurement program and
considering reducing the size of the Canadian Armed Forces or the number of
members, in order to pay for equipment that will probably take decades to make
it to the front lines?

Hon. Claude Carignan (Leader of the Government): I will repeat what I
told Senator Segal, word for word. As we explained in Economic Action Plan 2012,
Canadian Forces regular and reserve force strength will be maintained at 68,000
and 27,000 respectively, over the medium term.

Senator Dallaire: This is 2014, so 2012 is ancient history. In
preparation for the upcoming budget cuts is National Defence considering the
option of cutting Canadian Armed Forces personnel in order to pay for equipment
they will not see for decades?

Senator Carignan: I miss the beginning of question period when I had
questions that came from the public. Once again, we plan on maintaining regular
and reserve force strength at 68,000 and 27,000 members respectively, over the
medium term.

Hon. Catherine S. Callbeck: My question is for the Leader of the
Government in the Senate.

Many young people are not working. It's their generation that has borne the
brunt of the most recent recession. The unemployment rate of young people is at
a staggering 13.9 per cent. Given that information, I was really surprised to
learn that under the Federal Student Work Experience Program the number of
students in that program has dropped dramatically. In fact, it's gone from 8,305
students in 2011-12 down to 5,835 students in 2012-13. That's a drop of roughly
30 per cent. For many young people, this program opened the door for a job with
the federal public service.

My question is this: Why, at a time when the Public Service Commission of
Canada admits that it needs to renew itself, is this government eliminating so
many opportunities for the next generation to enter the public service?

[Translation]

Hon. Claude Carignan (Leader of the Government): As you know, Economic
Action Plan 2014 provides for key investments to ensure that today's youth have
the skills they need to be employed, and this includes employment in the public
service.

(1450)

We implemented the Canada Apprentice Loan, which gives apprentices registered
in red-seal trades access to interest-free loans. That is a total of more than
$100 million a year.

We are investing $40 million in internships for young Canadians by creating
some 3,000 internships for post-secondary graduates in high-demand fields and
by investing $15 million to support internships in small and medium-sized
businesses.

We are also supporting young entrepreneurs by investing an additional $40
million to give them access to mentoring, financial support, professional advice
and the space they need so that they can get their ideas off the ground and
start a business.

Since 2006, we have helped 2.1 million young Canadians get the training they
need or find a job. As you know, the Government of Canada is committed to hiring
students and offering workplace internships for youth and that commitment is
continuing.

[English]

Senator Callbeck: I have a supplementary question. With all due
respect, I'm asking about students who are hired into federal government
positions. The program I mentioned, the Federal Student Work Experience Program,
has been cut by 30 per cent. Co-op positions with the federal government have
dropped from 4,520 in 2011-12 to 3,408. That's a drop of over 1,100 positions.

It's not surprising that the Public Service Commission of Canada pointed out
at a Finance Committee that fewer graduates entered the public service in
2012-13, and there are also fewer employees 35 years old and younger. Well, it's
very simple. Their opportunities are being greatly reduced. At the same time,
the public service continues to age. We need young Canadians to continue to flow
into the public service. Will this government reverse the trend and start hiring
more young people?

Some Hon. Senators: Hear, hear.

[Translation]

Senator Carignan: Senator Callbeck, as I explained, we are investing
more than $100 million a year in various programs that help young people find
work in high-demand fields. This involves the private sector and small and
medium-sized businesses. The Canadian government will continue to hire student
interns based on their expertise and the needs of the public service.

Hon. Jean-Claude Rivest: Honourable senators, it is difficult to
understand why the government is stubbornly refusing to give up on its plan to
charge tolls on the Champlain Bridge.

Yesterday, in Montreal, representatives of the Government of Quebec and of
all municipalities in the Montreal area, including the mayor of Montreal, held a
meeting and once again reiterated the staunch opposition of all Montrealers and
Quebecers to the federal government's proposal to make the Champlain Bridge a
toll bridge.

I would remind senators that the Montreal metropolitan community, which
comprises all the mayors of the suburban municipalities — including the
excellent mayor of the city of Saint-Eustache, Mr. Pierre Charron — supports all
the Montreal area mayors, so we might think that Senator Carignan is probably
the only resident of Saint-Eustache to be in favour of a toll for the Champlain
Bridge at this time. I am not sure whether this is an act of courage or
blindness.

There used to be a toll on the Champlain Bridge. In 1990, the Canadian
government decided to abolish it in order to support the development of Montreal
and Montreal's south shore.

My question for the Leader of the Government is quite simple. Why are the
Canadian government's reasons for abolishing the toll no longer valid today,
even though Montrealers and Quebecers believe that imposing a toll on the
Champlain Bridge makes no sense from an economic or social standpoint?

I would like to remind the Leader of the Government that Montreal is an
island and that there are other ways onto the Island of Montreal, which then
should also charge a toll.

Why is the government intent on making this decision, which goes against the
interests of Montrealers?

Hon. Claude Carignan (Leader of the Government): Senator Rivest, I
completely disagree with you that this decision goes against the interests of
Montrealers. I believe that it is in the interest of Montrealers to have a
bridge as quickly as possible, at the lowest possible cost.

You reminded everyone of my roots in Saint-Eustache. I also sat on the board
of directors of the Montreal Metropolitan Community, and the mayor at the time
wanted to have a toll on all the bridges.

You see, decisions about whether to charge or not charge tolls change at the
whim of the mayor and with the political climate. With respect to the Champlain
Bridge, specifically, and its reconstruction, we remain committed to having a
new bridge in place by 2018, and we have always been clear: no toll, no bridge.

We announced the plan for the new bridge in January. This plan will allow us
to move forward as quickly as possible to have it completed by 2018. Given that
the safety of the people who use the bridge is paramount, we are making major
renovations to ensure the sturdiness of the current bridge until the new bridge
is ready. We have already invested over $380 million on maintenance, for
example.

As for the numbers and the business plan, of course we are not sharing
financial information at this time in order to protect the integrity of the
tendering process. That is one the demands of the mayors you mentioned regarding
the business plan, in particular.

I can assure you that the priority of the people of the Montreal Metropolitan
Community, including the people of Saint-Eustache, is to ensure that they feel
safe travelling across the bridge and that the bridge holds up.

Hon. Nancy Greene Raine moved third reading of Bill C-16, An Act to
give effect to the Governance Agreement with Sioux Valley Dakota Nation and to
make consequential amendments to other Acts.

She said: Honourable senators, the time has come for us to show our support
for a First Nation ready to take the historic step to self-government. We can do
so by endorsing Bill C-16, the Sioux Valley Dakota Nation Governance Act, and
passing it swiftly into law. Bill C-16 will enshrine as law the self-government
agreement negotiated in good faith by representatives of Sioux Valley Dakota
Nation and the Government of Canada.

It will establish a new modern and respectful relationship that will pave the
way for growth and economic development. Should the proposed legislation become
law, the Sioux Valley Dakota Nation Oyate government will gain much greater
autonomy and free itself from the paternalistic and, quite frankly, archaic
restraints currently in place under the Indian Act.

Under this legislation, the First Nation will be authorized to enact and
enforce laws in a broad range of areas. Sioux Valley Dakota Nation laws will
operate concurrently with laws that are made by the federal government and the
Manitoba provincial government providing for a comprehensive legal structure
that is defined by their tripartite agreement. With the new authority, Sioux
Valley Dakota Nation will be better able to meet the needs of its members and
plan for the community's bright and prosperous future.

The governance agreement at the core of Bill C-16 sets out more than 50 areas
where Sioux Valley Dakota Nation will have jurisdiction — that is, 50 areas
where the First Nation stands to gain autonomy and self-sufficiency by stepping
out from under ministerial control.

(1500)

However, the First Nation would not be required to exercise its jurisdiction
over all of these areas immediately. Instead, Sioux Valley Dakota Nation can
choose to "draw down" jurisdictions that are available to it when it feels ready
to do so. When it does exercise its authority in a new area of jurisdiction, the
corresponding Indian Act provisions will cease to apply on its lands. This
provision will allow for a smooth transition of power to ensure that there will
be no gaps in the legal structure.

Honourable senators, let me be clear. The governance agreement between Canada
and Sioux Valley Dakota Nation is not a land claim or a treaty. Neither is Bill
C-16. No new reserve land will be provided to the First Nation through this
process, nor will the agreement alter or recognize any constitutionally
protected rights that Sioux Valley Dakota Nation might have to lands or natural
resources.

This process is about putting in place new arrangements to modernize and
renew Sioux Valley Dakota Nation's relationship with Canada and Manitoba and to
give the First Nation greater control over its own affairs and the tools for
greater self-sufficiency and prosperity.

Honourable senators, Sioux Valley Dakota Nation recognizes that economic and
social development depend on a number of factors. For smaller communities, such
as Sioux Valley Dakota Nation, finding and securing the right partnerships is an
absolute must. By collaborating with partners, communities can access the
expertise and experience — and, in some cases, the funding — that they need to
achieve their goals. Partners can help start or expand businesses, design and
deliver programs and develop infrastructure projects.

Both the Sioux Valley Dakota Nation and our government view this governance
agreement as a tool that will enable Sioux Valley Dakota Nation to take
advantage of business opportunities as they arise.

To quote Chief Tacan:

... our Dakota young people want the opportunity for local employment,
supported by education, training and health so they are equipped to
contribute to their community. The Self-government Agreements with Canada
and the Province position Sioux Valley Dakota Nation to raise the standards
in these areas and other jurisdictions.

The link between self-government and increased prosperity is well
established. For example, following the finalization of its self-government
agreement, Sechelt First Nation of British Columbia has moved into a broad range
of economic activities, including forestry, tourism and, most recently,
hydroelectricity. Sechelt has also developed and leased tracts of reserve lands
to non-member residents. Partnerships with outside groups play a large role in
many of these ventures. It is my sincere belief that the passage of Bill C-16
will place Sioux Valley Dakota Nation in a similar position — that is, ready to
capitalize on its potential for economic growth and development.

Studies completed by several authoritative groups, including the World Bank
and Harvard University, document the links between self-government arrangements,
increased investor confidence, new economic partnerships and improved living
conditions. Studies conducted by Aboriginal Affairs and Northern Development
Canada found that self-governing communities experience increases in employment
levels that average well over 13 per cent.

Keen to forge similar links and achieve similar results, Sioux Valley Dakota
Nation entered into self-government negotiations with the Government of Canada
more than 20 years ago. The Province of Manitoba joined the negotiations a year
later, in 1992, and since then it's been a long, complicated and ultimately
fruitful journey.

In 2001, the First Nation concluded a comprehensive agreement-in-principle
with Canada and a corresponding tripartite agreement-in-principle with both
Canada and Manitoba. Over the following 10 years, all parties worked together to
finalize the details.

In 2012, Sioux Valley Dakota Nation developed and ratified an internal
constitution that includes strong provisions for democratic accountability.

Members of the community voted to approve the negotiated self-government
arrangements in October 2012, and all parties then signed the agreements this
past summer. Sioux Valley Dakota Nation has concluded a final agreement that is
both far-reaching and holistic. It is clear that all parties involved have
worked hard to put the pieces of this agreement in place. Now, the final step is
up to us.

Honourable senators, the benefits of self-government agreements extend well
beyond individual First Nations. In fact, they ripple across the country and
touch the lives of all Canadians. Confident, self-sufficient Aboriginal
communities make Canada a better place in every way: economically, socially and
culturally. Giving effect to the agreement with Sioux Valley Dakota Nation by
passing the legislation now before us would represent a significant
accomplishment for this country.

This will be the twentieth such agreement in Canada's history and the first
involving a Prairie community. Giving effect to the agreement would show that
partnership and dialogue produce positive, tangible results.

To end on another quote from Chief Tacan:

By working to maintain the current pace of progress leading to positive
change and through good relations with both Canada and the Province, our
self-government can lead to a better future for both Sioux Valley Dakota
Nation and the region of southwestern Manitoba.

I encourage all senators to join me in supporting Bill C-16 and making this
vision a reality.

The Hon. the Speaker pro tempore: Continuing debate.

[Translation]

Hon. Joan Fraser (Deputy Leader of the Opposition): Honourable
senators, I am not speaking to this bill as the critic. Our esteemed colleague,
Senator Dyck is our critic. However, as she could not be here today, she asked
me to read you a few words that she wrote down.

[English]

This is Senator Dyck speaking:

Honourable senators, I wish to speak today at third reading on Bill C-16,
Sioux Valley Dakota Nation Governance Act. I wish to make some general
remarks on this bill.

I would first like to thank the members of the Standing Senate Committee
on Aboriginal Peoples and the witnesses from the Sioux Valley Dakota Nation
and the Department of Aboriginal Affairs for allowing us to conduct a
thorough and quite expansive discussion on the implications of this bill
before us, as well as the larger area of legislative options available to
First Nations as they move away from the Indian Act.

Bill C-16 is a piece of legislation that gives effect to the governance
agreement that has been negotiated. As this is a stand-alone self-government
agreement, absent in dealing with the issues of land and Aboriginal rights,
there are no section 35 constitutional protections.

What is important to point out is that these section 35 questions can be
addressed in subsequent negotiations between the Sioux Valley Dakota Nation
and the governments of Canada and Manitoba. How this agreement fits into the
larger concept of self-government was succinctly stated by my colleague
Senator Sibbeston at committee.

I quote:

The difference is that the agreement and this bill can be amended by
Parliament. In this case, Parliament is supreme in terms of changing it.

But in a different one, where section 35 is involved, where the
agreement is protected and recognized under section 35 of the
Constitution, Parliament is not supreme. Section 35 of the Constitution
is supreme and would protect the agreement, so there's a difference.
It's not as weighty or enforceable as a treaty or a modern land claim
that has the protection of section 35. There's a real difference, and
this is lighter, in a sense.

My honourable colleague's interventions put this bill rightly in the
continuum of First Nation governance. While it moves away from the Indian
Act, this bill has not fully reached treaty status or a comprehensive land
claim. As witnesses for the Sioux Valley Dakota Nation told the committee,
at this moment, this is the option that Sioux Valley Dakota Nation chose to
pursue. It is also reassuring that they are pursuing negotiations with the
Government of Canada to address their other outstanding issues dealing with
section 35 rights. We wish them well in their ongoing negotiations with the
Government of Canada.

One of the concerns I had was that this bill would become the only
legislative option for First Nations to move out from under the Indian Act.
I didn't want to see a situation down the road where First Nations had their
hands tied, going forward with negotiations with the Government of Canada,
especially when dealing with coming to resolution on section 35 rights.

(1510)

I was assured by the officials from Aboriginal Affairs and Northern
Development and Justice Canada that this was not the case.

I would like to read into the record the remarks of Mr. Lee Webber, lead
counsel from Aboriginal Affairs and Northern Development Canada and Justice
Canada. He stated:

The senators generally might find it useful to refer to the
Government of Canada's inherent right policy. That is the policy
pursuant to which Canada engaged in these negotiations, or at least most
of the years of these negotiations. That is the policy that governs the
Government of Canada's participation in self-government negotiations at
multiple tables.

In that policy, it is very clearly spelled out that a range of possible
mechanisms can be adopted by the parties at negotiation tables as they see
fit. They can treaty protect an agreement. They can create a contract. They
can have legislation. There is this menu of possibilities, and it is in the
policy explicitly that essentially there's no one-size-fits-all approach.

Senator Dyck continues:

I am glad that these comments were stated by officials of the Government
of Canada in the context of this bill. This is an important point for both
the Sioux Valley Dakota Nation and other First Nations looking at their
options in moving away from the Indian Act.

I would like to congratulate Chief Vincent Tacan and the people of the
Sioux Valley Dakota Nation for their perseverance and hard work through a
16-year process.

Hon. Nick G. Sibbeston: Honourable senators, I'm pleased to speak
briefly about Bill C-16 and lend my support to it and the people of Sioux Valley
Dakota Nation, who through this bill will realize their goals.

In 1995, the federal government adopted a policy on the inherent right to
self-government for Aboriginal people. This policy recognizes that
self-government is one of the rights recognized under section 35 of the
Constitution. At the same time, the policy recognizes that self-government could
be provided in a number of ways. It could be in the form of a modern treaty,
such as that which established the Tlicho government in the Northwest
Territories, which we had the opportunity to deal with a number of years ago.
Such treaties are constitutionally recognized and protected, but Bill C-16 does
not deal with treaty making. This bill does not have the distinction and weight
of a modern treaty recognized under section 35. It is simply a negotiated
agreement between a First Nation, Canada and Manitoba.

The agreement allows a First Nation to take on responsibility for making laws
and administering their affairs that are now covered by the Indian Act and
carried out by the Department of Aboriginal Affairs. This bill will provide for
the Sioux Nation to have jurisdiction in approximately 50 areas that are now
contained in the Indian Act. The agreement provides for a gradual process
wherein it will take on responsibilities as it deems fit.

The Manitoba government will also pass corresponding legislation to give
effect to the agreement to cover the areas that affect provincial jurisdiction.

This approach of dealing with self-government is similar to that which
established the Sechelt and the Westbank First Nations in B.C., so it is not an
absolutely new approach, but it is new for the Prairie provinces and is seen to
be a significant advancement for the Sioux Valley Dakota Nation. It may serve as
a model for other First Nations in the Prairie provinces.

Bill C-16 represents a first step towards full self-government, and in time
it may well continue to attain full self-government and have it enshrined in
another act that will have the force and rights under section 35.

The process began in 1991 and is finally complete here today as it passes the
Senate and eventually gets Royal Assent.

I want to commend Chief Tacan for his leadership and all those who have been
involved through the years, all the people who have been involved to this date
in advancing the cause of the people. It is truly encouraging to see First
Nations come out from under the aegis of the Indian Act and be free to govern
themselves. This bill could well have been, and maybe should have been, called
the "set my people free bill," because it really does that. It sets the
Aboriginal people free from the aegis of the Indian Act and the federal minister
responsible for that department.

I commend this bill to you and hope that everybody will support it.

Hon. Charlie Watt:

[Editor's Note: Senator Watt spoke in Inuktitut.]

I'll quickly translate what I just said in Inuktitut. Regarding what I have
heard from the presenter of this bill, Senator Raine, I can only say that I hope
this will be carried out according to the way it has been spelled out.

Honourable senators, I rise today to speak at third reading on Bill C-16, the
Sioux Valley Dakota Nation governance act.

This process has not been an easy one. As Chief Tacan said, his people were
successful farmers originally, going back to the 1800s. But they were disturbed
by the system, with departmental policies limiting their ability to do what they
felt they needed to do to improve their own situation.

Unfortunately, their experience is not an isolated case. It is not
acceptable. This is why we've placed section 35 rights in the highest order of
the Constitution Act, 1982, to protect existing rights and future rights to be
acquired.

As my colleague Senator Nick Sibbeston pointed out, what has been negotiated
here could still be altered by Parliament. Because this bill does not involve
section 35, it does not have the supreme protection of the Constitution in the
same way. It is not as strong as a treaty or a modern land claim, which have the
section 35 protection. That difference must be acknowledged, that this bill is
not as enforceable as one that explicitly refers to section 35.

While this process has been under way for many years, more time to consider
its implications for today and down the road would have been useful.

I know the Sioux Valley Dakota Nation sees the need to depart from the Indian
Act and whatever else might be needed to be full-fledged Canadians, to have
access to the same benefits and opportunities as ordinary, non-Aboriginal
Canadians.

I want to be sure we are not setting a precedent for the other First Nations.
In other words, this is not necessarily the model that would fit all. The
Department of Justice told us at the committee that the Government of Canada's
inherent rights policy lays out a range of possible mechanisms for future self-government negotiations. So this bill does not have any binding impact on other
possible agreements.

I also want to note that this involves the Province of Manitoba. This spring,
it is expected that a tripartite agreement connected to this bill will be signed
in the Manitoba legislature, but during the transitional process while the
province is in negotiations, it is necessary to consider that general laws of
application under provincial section 88 of the Indian Act will still apply until
the effective date of the bilateral and tripartite agreements related to this
bill.

(1520)

I would like to raise those points on Bill C-16 to acknowledge that this
legislation is stand-alone and does not specifically refer to section 35 rights,
nor should it be considered to be precedent-setting.

Honourable senators, I congratulate the hard work and perseverance that have
been put into this piece of legislation.

The Hon. the Speaker pro tempore: Are honourable
senators ready for the question?

Hon. Senators: Question.

The Hon. the Speaker pro tempore: Is it your pleasure,
honourable senators, to adopt the motion?

Resuming debate on the motion of the Honourable Senator Frum, seconded by
the Honourable Senator Demers, for the second reading of Bill S-2, An Act to
amend the Statutory Instruments Act and to make consequential amendments to
the Statutory Instruments Regulations.

Hon. Céline Hervieux-Payette: Honourable senators, I am pleased to
share with you my thoughts on Bill S-2, An Act to amend the Statutory
Instruments Act and to make consequential amendments to the Statutory
Instruments Regulations, and some of the discussion surrounding this bill.

Under the guise of regulatory efficiency, the government is amending it
regulatory legislation to supposedly streamline the public administration;
however, these amendments seem to better serve the interests of government
rather than making the regulations more transparent and more accessible to
Canadian taxpayers.

The basic principle of the legislation passed by Canadian Parliament, in both
chambers — the House of Commons and the Senate — and confirmed by Royal Assent
by the Governor General of Canada, which is explained in greater detail in the
regulations that will later be approved by the joint committee of the House and
Senate, stems from the Constitution Act of Canada, a document that enshrines and
protects the rule of law.

The Privy Council Office guide book states that "...the terms of the law must
be knowable, not secret. If a regulation is not published, people cannot be
presumed to have had any way of finding out what their rights and
responsibilities were under it."

Although the government did not publish its regulations in the Canada
Gazette, the regulations are not automatically rendered invalid. However, no
one can be sentenced for violating unpublished regulations. In other words,
compliance with the law is not sufficient to enable the government to impose
sanctions on taxpayers under regulations that were not published in the
Canada Gazette. The regulations in question must be published if they are to
be enforced.

Bill S-2's process for incorporations by reference in regulations is made
even more difficult because of the rule about publishing a regulation, in
accordance with the legislation, sanctioned by the Joint Committee on Scrutiny
of Regulations. Bill S-2 contains two types of incorporation by reference in
regulations. The first is closed incorporation.

This type of reference is specific and cannot be amended if the regulation
remains unchanged. It is set out in the enabling legislation. Without prejudice,
the reference in question must be accessible to taxpayers, and the minister
responsible may not use the reference to get around the requirement to amend the
regulations. It would be too tempting to use this method to get around using the
formal process of legal examination, registration and publication in the
Canada Gazette.

Making a reference to an official document is useful for both the taxpayer
and the government, since as we know, data from Statistics Canada rely on the
integrity of the system. We must also remember that everything must be in
accordance with the enabling legislation. Although this reference has advantages
for both parties, we must remember that it is up to the department responsible
for making it accessible to all taxpayers, even if publication in the Canada
Gazette is not mandatory, as with the regulation in question. This means
that each minister or department has the latitude to interpret this and publish.

There is no general registry the taxpayer can currently consult to find the
latest version of a regulation that was the subject of a closed incorporation.
There is a real risk of inconsistency and especially lack of accessibility as a
result of the number of government departments and agencies that are governed by
laws and regulations.

According to clause 18.1 of Bill S-2, the second method of incorporation by
reference in regulations is dynamic, ambulatory or open. That method has even
more disadvantages for Canadian taxpayers. The incorporated document may exist
in only one official language, which is often the case with national and
international technical standards.

Second, the material incorporated by reference might be bilingual, but it
might not be free. However, by law, legislation and regulations must be free.
Third, the material incorporated by reference may be subject to copyright, which
considerably limits taxpayers' access and forces them to pay copyright fees.

In addition, the lack of a uniform publication system for all government
departments and agencies makes it far more difficult, sometimes impossible, to
access texts that have been amended to include material incorporated by
reference. In such cases, taxpayers who are unable to access the document will
have to challenge it before the courts. That means that their rights are greatly
diminished by a massive government machinery that is only serving its own
interests by not meeting its obligations that is, if it had the opportunity to
amend regulations without subdelegation.

The Scrutiny of Regulations Committee has always had serious reservations
about this type of subdelegation. It flies in the face of the fundamental
principle of giving taxpayers access to legislation, as it creates many barriers
to that access. In my opinion, the enabling legislation should always refer to
technical standards that are set by independent, expert organizations and should
reflect the possibility that it could be later amended to reflect new scientific
realities.

When it is up to the federal government to avoid duplication or
inconsistencies, it can refer to provincial or territorial regulations. When a
project is affected by legislation at both levels of government, incorporation
by reference in regulations can make it easier to implement regulations,
particularly environmental ones.

Some Commonwealth countries like New Zealand, Australia and Canada —
including the Province of Ontario — have made it a general rule to include
incorporation by reference in enabling legislation and have put the emphasis on
easy accessibility at little to no cost.

This method of open regulation, without reference to enabling legislation,
poses real risks when it comes to technical or scientific standards. We must not
forget that taxpayers do have not an established consultation mechanism at their
disposal. What is more, there is no official central registry that would allow
all government agencies to keep the information up to date as texts are amended.

Honourable senators, we know that there are some 3,000 regulations
representing slightly more than 30,000 pages, and 450 statutes that cover 13,000
pages, not including the number of directives. You understand that Bill S-2
confirms the current government's approach, which, in my opinion, defies the
rule of law for the sake of being expeditious.

What is more, the current government wants to confirm some 170 orders of
reference retroactively. This is a far cry from this government's mantra of
transparency, confirming that this method, which has been in effect since 2006,
was not valid. Finally, what is even more worrisome in this obscure process of
open incorporation by reference in regulations is the possible negative
influence that all kinds of lobbies might have.

Whether we are talking about food inspection and the amounts of products that
are harmful to health, such as the salt and sugar content in prepared foods,
studies show that the amounts that are acceptable today make no sense when it
comes to public health. Whether we are talking about the toxic emissions from
certain dangerous products or technical standards that are less costly to the
transportation industry, all this incorporation by reference in regulations will
not be automatically published, will not be easily accessible and will not be
subject to discussion.

(1530)

It seems to me that this government's ideology can be summed up by the edict
that good government is no government. Still, the primary goal of laws adopted
in Parliament and of regulation is to ensure a balance among the forces in play
and to protect the public from being taken advantage of by big corporations and
from the vast administrative apparatus of government organizations.

As a member of the Standing Joint Committee on Scrutiny of Regulations, I
would like to remind members of this chamber that the ability of
parliamentarians in both houses to carry out an objective review ended the
moment the Harper government won a majority. You don't need to be a rocket
scientist to see that the executive is constantly telling our Conservative
colleagues what to do. Having been a member or the chair of the committee since
1995, I can say that the contribution of members and senators is regularly
impeded during scrutiny of regulations.

Even if all we want to do is point out to a minister that a regulation has
flaws, we are forced to take a vote. Before the Harper government, the committee
was open, transparent and not subject to outside influences. It operated by
consensus. What can I say about material incorporated by reference that will
never be vetted by MPs or the Senate? That's why I can't recommend that senators
of any stripe vote in favour of Bill S-2. Doing so would give an entity as
powerful as the government freedom to use sub-delegation with no guarantee of
fairness and respect for the legal principle of delegatus no potest delegare.
I would add that even with the precaution of enabling legislation, respect for
the law begins with accessibility and parliamentary oversight, which Bill S-2
bypasses. Thank you.

The Hon. the Speaker pro tempore: Are Senators ready for
the question?

It was moved by the Honourable Senator Frum, seconded by the Honourable
Senator Demers, that this bill be read the second time. Is it your pleasure,
honourable senators, to adopt the motion?

On Government Business, Motions, Item No. 20, by the Honourable Senator
Martin:

That, pursuant to rule 7-2, not more than a further six hours of debate
be allocated for consideration at second reading stage of Bill S-2, An Act
to amend the Statutory Instruments Act and to make consequential amendments
to the Statutory Instruments Regulations.

Hon. Yonah Martin (Deputy Leader of the Government): Honourable
senators, pursuant to rule 5-10(2), I withdraw this Notice of Motion.

Resuming debate on the motion of the Honourable Senator Moore, seconded
by the Honourable Senator Day, for the second reading of Bill S-204, An Act
to amend the Financial Administration Act (borrowing of money).

Hon. Wilfred P. Moore: Honourable senators, this bill, of which I am
the sponsor, stands in the name of Senator Marshall. I have an agreement with
the Deputy Leader of the Government in the Senate that upon completion of second
reading, Bill S-204 would be referred to the Standing Senate Committee on
National Finance. I would like to know if that will happen.

Hon. Elizabeth Marshall: I took the adjournment of the debate last
week, and I have started to prepare my speaking notes. However, I don't have the
notes finalized today, so I'm not ready to speak.

Senator Fraser: We had a deal.

Senator Moore: The government spoke at second reading last week, which
was a bit of a breach because it was to be done when I was here. I had that
arrangement with the deputy leader, that when the bill receives second reading,
it is to be referred to the Standing Senate Committee on National Finance. I
want to know if the bill will be referred today.

Hon. Yonah Martin (Deputy Leader of the Government): Senator Moore, I
know what discussion we had, and I regret to say that today we will not refer
the bill to committee, as Senator Marshall explained.

Senator Mercer: Your word is not worth anything. Shame on you!

The Hon. the Speaker pro tempore: I remind colleagues that we
cannot debate as there is a motion before the house to adjourn the debate. I
will allow a few questions for explanation but definitely no debate. Senator
Moore has a question for Senator Martin.

Senator Moore: Yes. I would like to know if Bill S-204 will be
referred to committee this week, pursuant to our agreement.

Senator Martin: Senator Moore, I cannot say that it will be referred,
but I will have a conversation with the deputy leader opposite. I regret to say
that it is not being referred today and that I cannot give you that commitment
at this time.

Senator Cordy: Shame, shame!

The Hon. the Speaker pro tempore: It is moved by the Honourable
Senator Marshall, seconded by the Honourable Senator Martin, that debate be
adjourned to the next sitting of the Senate. Is it your pleasure, honourable
senators, to adopt the motion?

Some Hon. Senators: No.

Some Hon. Senators: Yes.

And two honourable senators having risen:

[Translation]

The Hon. the Speaker pro tempore: The standing vote will
take place in exactly one hour, at 4:35 p.m.

[English]

(1630)

Motion agreed to on the following division:

YEAS
THE HONOURABLE SENATORS

Andreychuk

McInnis

Ataullahjan

McIntyre

Batters

Mockler

Bellemare

Neufeld

Beyak

Ngo

Black

Ogilvie

Boisvenu

Oh

Buth

Patterson

Carignan

Plett

Champagne

Poirier

Dagenais

Raine

Doyle

Rivard

Eaton

Runciman

Enverga

Segal

Fortin-Duplessis

Seidman

Gerstein

Seth

Greene

Smith (Saurel)

Housakos

Stewart Olsen

Johnson

Tannas

Lang

Tkachuk

LeBreton

Unger

MacDonald

Verner

Maltais

Wallace

Manning

Wells

Marshall

White—51

Martin

NAYS
THE HONOURABLE SENATORS

Callbeck

Jaffer

Chaput

Joyal

Charette-Poulin

Lovelace Nicholas

Cordy

Mercer

Cowan

Merchant

Dallaire

Mitchell

Dawson

Munson

Day

Ringuette

Downe

Robichaud

Eggleton

Sibbeston

Fraser

Smith (Cobourg)

Hervieux-Payette

Watt—25

Hubley

ABSTENTIONS
THE HONOURABLE SENATORS

Cools

Moore—2

(1640)

Senator Moore: Your Honour, I would like to say a few words as to why
I decided to abstain. I want to have the opportunity to speak to what's
happening here.

I've been in this chamber since 1996, and this institution runs on honour.
"Honour" is before each of our titles. That's our name; that's how this place is
run. It means you keep your word. I have done that since I have been here. Any
time I've entered into an arrangement with anybody on the other side or with
colleagues on this side, I've kept my word. You don't decide to keep your word
one day and then say, "No, I'm not going to do it," the next day. You do it
every day. That's the bedrock of this institution, Your Honour.

This little incident here today is the canary in the mine. I want you to
really think about what has happened here. It's absolutely wrong. I discussed
this arrangement with Senator Martin. She said, "I'll have to check with someone
and get back to you." I said, "Fine, ma'am. Go do that." Senator Martin did that
and came back and said, "We have a deal." The deal was that, upon Senator
Hervieux-Payette making her speech on Bill S-2, my bill, Bill S-204, would be
referred to the Standing Senate Committee on National Finance.

That hasn't happened. And I wanted it to happen this week. That was the deal.
I'm hoping, Your Honour, that it will happen this week. That was the
arrangement, and I hope that people's word will be kept. Otherwise, I don't know
how we can carry on in the future if we can't make arrangements to mutual
satisfaction and move on to other issues.

The Hon. the Speaker pro tempore informed the Senate that the
following communication had been received:

RIDEAU HALL

March 4, 2014

Mr. Speaker,

I have the honour to inform you that Mr. Stephen Wallace, Secretary to
the Governor General, in his capacity as Deputy of the Governor General,
signified Royal Assent by written declaration to the bill listed in the
Schedule to this letter on the 4th day of March, 2014, at 3:59 p.m.

Yours sincerely,

Patricia Jaton
Deputy Secretary

The Honourable
The Speaker of the Senate
Ottawa

Bill Assented to Tuesday, March 4, 2014:

An Act to give effect to the Governance Agreement with Sioux Valley
Dakota Nation and to make consequential amendments to other Acts. (Bill
C-16, Chapter 1, 2014)

Resuming debate on the motion of the Honourable Senator Ringuette,
seconded by the Honourable Senator Smith, P.C. (Cobourg), for the
second reading of Bill S-202, An Act to amend the Payment Card Networks Act
(credit card acceptance fees).

Hon. Yonah Martin (Deputy Leader of the Government): Honourable
senators, I'm not the critic of this bill but I see that it is at day 15, so I
ask that it be reset, and we will move to designate a critic for this bill. We
don't have the critic at this time.

[Translation]

Hon. Pierrette Ringuette: I have several questions. First of all, who
will be the critic?

(1650)

[English]

Senator Martin: I don't have a critic at this time, but I will look at
this and have a discussion with Senator Fraser.

Senator Ringuette: Now please just call the question. If you want to
call the question, call the question, leader. Call it.

Senator Carignan: If you are ready.

Senator Ringuette: This bill was tabled for the fifth time last
October. After I talked, Senator Maltais took the adjournment for 15 sitting
days. When his fifteenth day was up, he was not present. Senator Martin said
that she would take the adjournment and reset the clock for another 15 days.

So the question is this: Do you or do you not have a viable critic for this
bill, or can you not handle it?

Senator Tkachuk: We don't have a critic. We answered your question.

Senator Martin: Right. I don't have a critic at this time, but I'll
have a conversation with Senator Maltais. At this time, I don't have the name of
the critic.

[Translation]

The Hon. the Speaker pro tempore: Senator Ringuette, I
have an adjournment motion here. I gave you two questions, you got two answers,
so unless the next question is meant to clarify one of the answers you received,
we cannot have a debate on the question to be put. A simple little question.

Senator Ringuette: Mr. Speaker, I understand that you are enforcing
the rules, except that, as in the previous case, some senators in this chamber
have no regard for the fact that other senators have good intentions.

The Hon. the Speaker pro tempore: Senator Ringuette, I
do not want to get into a debate. I understand that you do not want to debate
with me, but I cannot allow you to debate with Senator Martin.

I have no problem if you want to clarify an answer. You had two questions and
I understand that you do not have a third. I will put the motion to adjourn.

[English]

It is moved by the Honourable Senator Martin, seconded by the Honourable
Senator Marshall, that further debate be adjourned until the next sitting of the
Senate.

Resuming debate on the motion of the Honourable Senator Fortin-Duplessis,
seconded by the Honourable Senator Poirier, for the second reading of Bill
C-266, An Act to establish Pope John Paul II Day.

Hon. Terry M. Mercer: Honourable senators, I had hoped to speak on
this bill. It has been on the Order Paper for some time and has been reset at
least once. I would like to know when we will get to it, because I am preparing
a speech.

The Hon. the Speaker pro tempore: I presume you are
asking a question of Senator Martin.

Hon. Yonah Martin (Deputy Leader of the Government): It's standing in
my name, but I don't wish to speak to it. I was going to see if we could move it
to committee by calling the question on the second reading. No? Okay.

Senator Cowan: Maybe today wouldn't be a good day for that.

An Hon. Senator: Oh, oh!

Senator Mercer: As I indicated, Your Honour, I did want to speak on
this bill, and I'm preparing some notes. I am not prepared to speak now. I would
like it adjourned in my name, if we could.

The Hon. the Speaker pro tempore: The bill is already
adjourned in the name of Senator Martin. Senator Martin may agree to let you
speak at the next sitting of the Senate.

An Hon. Senator: Oh, oh!

The Hon. the Speaker pro tempore: Order, please!

That will be the proper way to do it. The bill has been stood. If you want to
speak at the next sitting, why not speak to Senator Martin. I am sure she will
gladly give you the floor to speak.

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Plett, seconded
by the Honourable Senator Marshall, for the second reading of Bill C-394, An
Act to amend the Criminal Code and the National Defence Act (criminal
organization recruitment).

Hon. Roméo Antonius Dallaire: Honourable senators, this motion is very
important to communities across our country, and particularly to diaspora
communities. I plan on speaking tomorrow.

That, pursuant to rule 12-24(1), the Senate request a complete and
detailed response from the Government to the Eighth Report of the Standing
Senate Committee on Transport and Communications entitled: One Size
Doesn't Fit All: The Future Growth and Competitiveness of Canadian Air
Travel, tabled in the Senate on April 17, 2013, during the First Session
of the Forty-first Parliament, and adopted on May 7, 2013, with the Minister
of Transport being identified as the minister responsible for responding to
the report.

That the Senate call upon the Members of the House of Commons of the
Parliament of Canada to join the Senate in its efforts to increase
transparency by acknowledging the longstanding request of current and former
Auditors General of Canada to examine the accounts of both Houses of
Parliament, and thereby inviting the Auditor General of Canada to conduct a
comprehensive audit of House of Commons expenses, including Members'
expenses, and

That the audits of the House of Commons and the Senate be conducted
concurrently, and the results for both Chambers of Parliament be published
at the same time.

I'd like to raise a point of order relating to Senator Downe's motion. It is
relatively a rare occurrence that the Senate attempt to instruct the House of
Commons on how it should conduct its own business. Autonomy is integral to the
proper function of both chambers. There have been times in the history of
Parliament when one chamber has attempted to direct the other and in these
cases, however, the house or Senate leadership has determined that each chamber
remains the master of its own domain.

For example, there is the ruling by Senator Speaker Daniel Hays on June 19,
2003, on a question of privilege regarding the then Privacy Commissioner George
Radwanski. Senator Lowell Murray raised a question of privilege urging the House
of Commons to resolve the issue of Commissioner Radwanski's status as an officer
of Parliament. In his ruling, Senator Hays stated:

As a Senate and as senators, we might dispute what has occurred in the
other place, but... both Houses are fully independent and autonomous. Each
are entitled to the protection of privilege and each have the right to
conduct their proceedings as they see fit. I do not see how the Senate can
invoke privilege in this case to challenge what was done in the other place.

In 2008, the House of Commons sent a message to the Senate requesting that
the upper chamber expedite Bill C-2, the Tackling Violent Crime Act. Ultimately,
the message from the House of Commons was not binding on senators or the
activities of the Senate. Even though the House of Commons encouraged the Senate
to act in a certain fashion on legislation, the Senate still retained full power
and responsibility over its decisions.

In the house today, they denied unanimous consent to a motion by one of its
own members, very similar to the one to call in the Auditor General, and so I
think that Senator Downe's motion is moot, as it should be, honourable
colleagues.

Much of the current debate surrounding the role of the Senate has focused on
the need for maintaining the independence of our parliamentary chambers and, as
senators, we recognize the need for public accountability and transparency. This
chamber has elected to invite the Auditor General to conduct an audit of Senate
expenses. At some point, the House of Commons may wish to do something similar.
In any case, honourable senators, that decision rests with the house and not us.
I think to do otherwise would create a precedent which would threaten the
independence we treasure in our bicameral system.

Hon. Percy E. Downe: Mr. Speaker, that's a very interesting point of
order. Unfortunately, it has nothing to do with my motion. You read out my
motion. We're not giving any instructions at all.

The Hon. the Speaker pro tempore: We are on the point of
order. I'm ready to listen to all the arguments. It is an important question
that is in front of us and I think we have to go thoroughly on that point of
order, and I will appreciate all the arguments presented to me.

Hon. A. Raynell Andreychuk: Much as I am sympathetic to the content of
the motion that Senator Downe is proposing, my background leads me to believe
that we should not be commenting, or instructing, or advising, or pleading with
the house to take action. I think that may be one step too far.

I think what I would suggest to the Speaker is that we look at a ruling also,
in addition to the one that my colleague has quoted, and that was on May 13,
2008, when the Honourable Noël Kinsella ruled, in a debate that had to do with a
motion of Senator Moore, seconded by Senator Day, on the second reading of Bill
C-253.

I'll just refer you to that judgment of the Honourable Noël Kinsella, but he
did point out in one phase of this ruling:

As honourable senators know, each House is master of its own procedure,
within the bounds of the Constitution and the law. Just as honourable
senators would object to the other place examining Senate procedures, it is
inappropriate for the Senate to question those of the Commons. As noted in
Beauchesne's, sixth edition, at citation 4, one of most important privileges
is the right for each chamber "... to regulate..." its own "... internal
proceedings... or more specifically, to establish binding rules of
procedure." This point has been made at different times in Speakers' rulings
here in this place. In fact, reference was made to some of these rulings in
debate on the point of order.

I say that each one of these that is raised is not quite the same, but I
think we have consciously said that we will not comment as to how they
internally regulate themselves. Certainly, whether they are audited internally,
externally, or in any other manner I think is for the house to determine. While
I believe their statements about this place have been inappropriate recently, I
would wish that they would respect these kinds of rulings in the other place,
but the fact that they do not is not an invitation for us to interfere in their
deliberations about their matters. I just put that in for further consideration.

Senator Downe: Again, these points of order are very interesting, but
they do not pertain to this motion. You read it out. You read it on the record.
Their comments are very interesting if my motion was speaking about what they're
talking about. It is not, so I call upon you to allow the debate to continue.

Hon. Joan Fraser (Deputy Leader of the Opposition): Colleagues who
have listened to me run on at length over the years will know that I yield to no
one in my defence of the independence of the two chambers, but I think this
motion has been very carefully worded to avoid interfering with the independence
of the two chambers.

This motion calls upon; it invites. It does not instruct. It does not wave
any kind of lever as blackmail. It is very similar in nature to motions that we
pass quite routinely, where we call upon the House of Commons to join us in
expressing opinions about various developments, frequently in foreign affairs.
We call upon the House of Commons to join us in expressing congratulations to,
for example, Her Majesty on certain auspicious occasions, and so does this.

What it offers is an opportunity — a wholly proper opportunity, Your Honour —
for senators to rise and speak about the need for transparency in Parliament, in
all of Parliament. I can hardly think of a more appropriate topic, one more
within the spirit and tradition of the Senate. However, Your Honour, I would
like to do some detailed research. As you said, this is an extremely important
question. The question of the relations between the two chambers goes to the
very heart of what Parliament is all about.

I have not had time, not having had warning this was coming, to consult the
authorities. Unless Your Honour is prepared to rule that the debate on the
substance of the motion continue now, which would be my preference, I will move
the adjournment of the debate on the point of order.

The Hon. the Speaker pro tempore: There's a second
question, a sub-question that is raised now. I will want to hear comments on
whether I can accept a motion to adjourn.

Senator Carignan: No.

The Hon. the Speaker pro tempore: Wait. Let me phrase
the question properly. I want to make sure, because there is a sub-question
here.

The adjournment of debate on the point of order, that's the sub-question.
Let's open the discussion only on that. I'm ready to hear arguments on that.

(1710)

I hear Senator Cools. Probably there are other colleagues. Senator Cools, you
have a point to make.

Hon. Anne C. Cools: Honourable senators, this has taken me by
surprise. I was going to suggest to the house, to senators, that because of the
importance of the subject matter and its enormous complexity, and also because
other senators, not present, might be very willing and interested in taking
part, we could engage in a process that we have engaged in before, that is to
put over the debate. We have precedents where we have allowed the debate to be
adjourned, or held over, on points of order and questions of privilege. That has
happened before in the Senate.

I think we should put a request first to say that we should go down that
route of holding or suspending the debate. This is a very large issue. We must
not forget as well that it also brings to mind many other important issues. To
begin with, as I have said on the floor of this house on several occasions,
there is no power in the Auditor General Act to audit either the Senate or the
House of Commons or their members. And no resolution of either house can
overcome that abuse of power.

Honourable senators, in addition, we are very well aware that the Auditor
General is also an office-holder by letters patent issued by Her Majesty. I
would not like to see that office pulled into this debate, particularly because
of the sensitive business that is audit.

Colleagues, I would love the opportunity to be able to look at the subject
matter a little bit more closely, and I would ask senators to adjourn or hold
over the debate and let it continue tomorrow, when I will have had an
opportunity to wrap my mind around this and to look at some authorities.

Your Honour, Senator Nolin, we have done this before. A good point of order
deserves very profound and deep study. I would like an opportunity to give it
some study.

Honourable senators, I think, in all fairness, other senators should be
allowed a moment to study the matter.

The Hon. the Speaker pro tempore: Senator Andreychuk, I
must tell you that I'm inclined to agree with Senator Cools, but I'm ready to
hear a contrary argument. I think it's a fundamental question that we've been
asked by Senator Downe's motion and by the point of order raised by Senator
Tkachuk. We will have to go thoroughly to the bottom of that question. It's not
going to be superficial. It needs to be a thorough examination of the question.
I'm inclined to agree to let senators look into all their books and go to their
literature and come back to the chamber.

I'm ready to hear a contrary argument.

Senator Andreychuk: I was going to stand up initially to say that
perhaps the motion is attempting to do indirectly what it shouldn't be doing
directly, and I will save that argument.

Senator Nolin, you have entered the debate in indicating that you wanted to
hear more. I think that it is here a point of order, not a point of privilege.
Therefore, I would believe that you could rule on the issue. But I hear that you
are not satisfied in your investigation, and I think while it may be new and
innovative to do so, this chamber should allow you as much time as you deem
necessary to make the appropriate decision. I'm yielding to your indecision at
this point as perhaps the fair one to deal with this important point.

The Hon. the Speaker pro tempore: Are there any other
arguments? Senator Mercer.

Hon. Terry M. Mercer: Yes, Your Honour. I appreciate your concern and
your leadership on this, but I would urge you to rule against the point of
order.

It's very clear in Senator Downe's motion that the House of Commons is being
asked to join the Senate in its efforts to increase transparency by
acknowledging, et cetera, et cetera. No direction is given to the House of
Commons. We've sat around here for the last year and heard the members of the
other place demanding that we do this and demanding that we do that, and we did
not respond directly to any of those demands, as they may not respond to our
passing this motion. It's important that we have this discussion, and I think
it's very clear that this is not a direction. This chamber has no authority to
give direction to the other place, nor do they have authority to give direction
to us. I think we should allow the debate to continue and hear Senator Downe's
speech. I'm very much looking forward to what he has to say.

The Hon. the Speaker pro tempore: Colleagues, I don't
want to argue on the question itself that is raised by Senator Tkachuk, but just
by reading two words, "call upon," and "invite," that needs to be properly
reflected on. Let's be creative now. Instead of accepting a motion to adjourn
the debate, I will suspend the discussion on it. Honourable senators will go
back to their libraries and look at their books, and we will reopen the
discussion on that at the next sitting, or whenever someone is ready to take the
floor and to reopen the discussion on that suspended discussion. Is it agreeable
to everybody?

Hon. James S. Cowan (Leader of the Opposition), pursuant to notice of
February 26, 2014, moved:

That a Special Committee on Equalization and Fiscal Federalism be
appointed to consider whether the current formulae for equalization and
other related federal transfers affect the ability of Canadians living in
all regions of the country to access a basic standard of public services
without facing significantly different levels of taxation.

That the committee be composed of nine members, to be nominated by the
Committee of Selection and that four members constitute a quorum;

That, the committee have power to send for persons, papers and records;
to examine witnesses; and to publish such papers and evidence from day to
day as may be ordered by the committee;

That, notwithstanding rule 12-18(2)(b)(i), the committee have power to
sit from Monday to Friday, even though the Senate may then be adjourned for
a period exceeding one week; and

That the committee be empowered to report from time to time and to submit
its final report no later than March 31, 2015.

He said: Colleagues, as you know from my statement in this chamber last week,
the purpose of this motion is to launch a national conversation on equalization
and our fiscal federalism. I know this won't be easy. Just say the word
"equalization," and most Canadians tune out. The word conjures up complex
formulas and obscure concepts like fiscal capacity caps and 10-province
standards. Hardly the stuff of everyday talk for Canadians around their morning
coffee pot.

Those are the technical details that mask the real issue. Equalization, in
fact, is all about what kind of nation we are, and what kind of nation we are
building for the future. And that is something that concerns every Canadian.

Former Prime Minister Joe Clark in his recent book named equalization along
with pensions and medicare as programs that, in his words, "confirmed that we
are a society as well as a geography."

Why? Because the whole principle and purpose of equalization is to say that
being a Canadian means that wherever you live across this great country, there
are certain basic standards you can expect — that is part of what we stand for
as a nation, part of what being Canadian is all about.

As the 2006 expert panel put it:

... it means that if people live in Newfoundland and Labrador or British
Columbia, Montreal or Medicine Hat, their children should have reasonably
similar opportunities to get a good education. They should have access to
reasonably comparable health care, social services, and justice systems. And
people in one part of the country shouldn't pay substantially higher taxes
to support those services compared with their fellow Canadians in other
parts of the country.

I think that many Canadians have lost sight of this. It's not surprising
given the loaded words that have come to be injected into the equalization
debate, words like "have" versus "have-not" provinces, and "handouts" and
"dependency." Language matters, colleagues; it shapes and defines the ideas it
expresses. So instead of presenting equalization as a program critical to
nation-building and national unity, the language used at times can suggest the
program does the exact opposite, pitting province against province, region
against region.

In fact, equalization payments are not made by "rich" provinces to "poor"
provinces. They are made by the Government of Canada from revenues collected by
that government from all Canadian taxpayers. That makes sense. It is, as I have
said, a Canadian principle of what we stand for as a nation — part of what we
have agreed it means to be a Canadian.

(1720)

It is easy to lose sight of that principle when looking at a program with as
bland and technical a name as "equalization." I appreciate that. Some might say
it's very Canadian of us, to give a program as vital to our national identity
such an unassuming, modest name. Certainly "equalization" does not begin to
convey its role in our federation, historically and continuing today. "Equality
of Canadians" might be more accurate, or "Canadian Fairness, from Coast to Coast
to Coast."

Every single Canadian province has received equalization at one time or
another in our history. Indeed, while some commentators rightly point out that
similar transfers have been part of our federation since Confederation, the
equalization program per se began in response to the near bankruptcy of the
three Prairie provinces following the Great Depression — yes, equalization was
created in part to help Alberta, then in desperate straits. It was an idea of
the landmark Rowell-Sirois Royal Commission, whose report in 1940 recommended
the institution of what it called "National Adjustment Grants." These were
described by the commission as follows:

They are designed to make it possible for every province to provide for
its people services of average Canadian standards and they will thus
alleviate distress and shameful conditions which now weaken national unity
and handicap many Canadians. They are the concrete expression of the
Commission's conception of a federal system which will both preserve a
healthy local autonomy and build a stronger and more united nation.

It was born from the brutal experiences of so many Canadians during the Great
Depression.

That was more than 70 years ago. Since then, equalization became such a vital
part of our national fabric that Canadians decided to entrench it in the
Constitution in 1982.

Section 36 is the relevant section. The first subsection, 36(1), says in
relevant part that:

... Parliament and the legislatures, together with the government of
Canada and the provincial governments, are committed to

... providing essential public services of reasonable quality to all
Canadians.

This is a powerful statement of national principle, colleagues.

Subsection (2) then addresses equalization specifically. It states:

Parliament and the government of Canada are committed to the principle of
making equalization payments to ensure that provincial governments have
sufficient revenues to provide reasonably comparable levels of public
services at reasonably comparable levels of taxation.

Notice, colleagues, that subsection (1) is a statement of principle by all
governments, federal and provincial. Subsection (2) is a commitment by the
government and Parliament of Canada. So it is not a question of so-called "have"
provinces giving some form of welfare to so-called "have-not" provinces.
Frankly, that is insulting. Equalization is a Canadian program, funded by
Canadians as Canadians, to ensure that all Canadians have access to "reasonably
comparable levels of public services at reasonably comparable levels of
taxation."

Is this a principle Canadians still believe in? That is a serious debate we
can have. For my part, I can state without equivocation that yes, I do believe
in this principle. I don't believe that Canada is about firewalls protecting
gated communities. I don't believe it is right as a nation to accept wildly
different standards of public services across the country. I believe Canadians
would be very disappointed — and rightly so — if we became a nation divided that
way.

I think most Canadians understand that a patchwork of better and lesser
regions does not build a strong, resilient nation. And that a region that is
"up" today may well find itself facing harder times tomorrow. As I said, every
province has received equalization at one time or another in our collective
history. There is no province that has been exempt. I mentioned Alberta earlier,
and how in fact the equalization program developed largely in response to the
needs of that province and the other Prairie provinces during the Great
Depression. Well, Alberta continued receiving equalization payments even after
the discovery of oil in that province — indeed, for seven years after.

Let's be clear: Equalization is not, and never was, about reducing
individuals' income inequality between regions, or reducing regional economic
disparities. It's not about economic development. It is about fiscal
disparities, to make sure all provinces across the country have enough revenue
to provide Canadians everywhere with reasonably comparable levels of provincial
services at reasonably comparable levels of taxation. It is about making sure
that people are not forced to leave a province because of exorbitant taxes
levied to provide that basic level of service — and it is about making sure that
Canadian families and businesses are not forced to reject a province they
otherwise want to live or set up business in because of substandard economic and
social conditions.

So why is this an issue now? Because, since coming to power, the current
government has made certain changes to equalization and the other
federal-provincial transfers that many believe affect this principle — that, in
fact, the impact of these changes is that Canadians living in different parts of
the country will not be able to access reasonably comparable levels of public
services at reasonably comparable levels of taxation. This is something that
deserves public debate — a serious, national conversation. Yet so far —
undoubtedly because of the complexity of the issues and the technical jargon
associated with them, and perhaps also some lack of political courage to tackle
such a controversial issue — we have not had that discussion.

I believe the Senate has an obligation to encourage that debate — it is
difficult to imagine a subject that more directly relates to the future of the
regions that we are here to represent. And we are all well positioned to launch
that conversation. The Senate has a long history of taking on public policy
issues that are both complex and that, for one or another reason, the other
place is not addressing. Equalization and the future of our fiscal federation
certainly satisfy these criteria.

I believe it would be useful for everyone if I placed on the record a brief
outline of the programs, with a focus on the recent changes. Colleagues, I
promise there will be no graphs and no mathematical formulas. I invite you to
join me in pledging to try to keep this discussion a jargon-free zone. I realize
the economic terms that are used have precise meanings that are useful to those
who use them, but they are not necessary to this debate, and in fact stop many
from participating in the debate. So while I recognize that we may lose some
nuance, I would hope that we can restrain ourselves to using our two official
languages only, and set aside that other language, "Econo-speak."

One final caveat: This is indeed a very complicated issue. I have tried to
present the issues as accurately as possible, but I make no claim to being an
expert. I welcome corrections and clarifications.

There are three major federal transfer programs that together create what we
call our "fiscal federalism": the equalization program itself; the Canada Health
Transfer, or CHT, as it is known; and the Canada Social Transfer, or CST. Let me
begin with equalization.

Equalization was designed from the beginning to look at a province's ability
to raise revenues — its so-called "fiscal capacity" — compared to the ability of
other provinces. The decision to focus on provinces' fiscal capacity was a
rejection of the approach taken elsewhere, such as Australia, which was to look
at both a province's ability to generate revenue and its spending needs. The
concern was that a needs-based approach would lead to federal intrusion into
areas of provincial responsibility.

Originally, provinces would receive equalization payments if the revenue they
could generate from three taxes set at a certain tax rate was less than what the
two richest provinces at the time could generate at those same tax rates. If you
are interested, the three provincial taxes used were income tax, corporate tax
and succession duties — the three taxes that applied in all provinces.

Over time, the formula became more and more complicated as more provincial
revenue sources were added. Among the early changes were the inclusion of things
like revenues from provincial sales tax, motor vehicle fuel tax, alcoholic
beverage revenues, and, most significantly, royalties from natural resources,
notably oil. As will become clear, energy revenues have been, and continue to
be, the most complicating and also controversial parts of this program. Over the
years, solutions varied from including 100 per cent of energy revenues and tax
bases in the formula, to including certain energy revenues, to including 50 per
cent of all non-renewable resource revenues. Throughout the years, what revenue
sources to include has been one major issue.

(1730)

Another issue has been which provinces to include as the "standard" to which
each province would be compared. Originally, as I said a moment ago, the
comparison was to the two most revenue-rich provinces. This quickly changed five
years after the program began with the introduction of the so-called
"10-province standard." That is, equalization was then based on the average per
capita revenue of all 10 provinces. Now, this change negatively impacted the
four Atlantic provinces. Recognizing this, the federal government increased
certain grants — special adjustment grants — to these provinces.

This was more or less the state of affairs that continued until 1982. The
problem faced in 1982 was very simple: Alberta's oil revenues were driving up
the 10-province standard and making the program very expensive for the federal
government. A decision was therefore made to exclude the richest province,
Alberta, and also the four poorest provinces, then the four Atlantic provinces,
from the formula. The result was the so-called "five-province standard."

Colleagues, in the interest of time I will not detail the various proposals
and changes that were made in the intervening years, but having I hope set out
the basic structure I will now jump to the major changes that were made to the
equalization program in recent years.

In 2007, the Harper government moved to an equalization program that returned
to the 10-province standard but included only 50 per cent of natural resource
revenues. At the same time, it introduced a fiscal capacity cap. Colleagues,
this gets complicated, but it is important. This cap was designed to make sure
that after equalization, the fiscal capacity of a province receiving
equalization did not exceed that of a province that didn't receive equalization.
For purposes of calculating the fiscal capacity cap, 100 per cent of a
province's natural resource revenues were included, as well as offshore accord
revenues, something that was relevant to my province of Nova Scotia and to
Newfoundland and Labrador.

In 2009, two more important changes were introduced. First, the government
redefined the "fiscal capacity cap." Instead of being equal to the fiscal
capacity of the lowest non-recipient province, it was defined as the average
fiscal capacity of the equalization-receiving provinces. You can appreciate what
a significant change that was. Looking back over the history of the program, it
has gone from being a measure against the revenue-generating capacity of the
two richest provinces to being limited by the average fiscal capacity of the
equalization-receiving provinces.

The second change made in 2009 was no less significant in its impact. The
government introduced a ceiling, limiting growth in the equalization program to
the three-year average growth in GDP. This second cap, distinct from the fiscal
capacity cap, is set to remain in place until 2018-19.

The Council of the Federation, which of course is made up of all 13 provinces
and territories, has said about these changes:

As a result of these changes, the current Equalization Program no longer
brings the revenue-raising capacity of Equalization-receiving provinces up
to the national average standard established by the 2007 Program. Total
funding provided within a fixed enveloped program does not adequately
respond to the overall level of fiscal disparities among provinces. An
increase in entitlements for one receiving province leads to lower
entitlements for the other receiving provinces.

To be clear, colleagues: According to the provinces, the equalization program
no longer fulfills the purpose for which it was intended.

The Council of the Federation continued:

The working group estimates that between 2009/10 and 2013/14, total
Equalization entitlements will be a cumulative $17.8 billion less than they
would have been under an "unconstrained" program. For this year, 2012/13,
total Equalization entitlements have been reduced from $18.6 billion to
$15.4 billion due to these changes.

In other words, the cap really means a $17.8-billion gap across the nation.

Honourable senators, equalization was first envisioned as a nation-building
program. Instead, today the fixed-pool approach pits Canadians against each
other because no province can gain in entitlements without other jurisdictions
losing.

The highly respected Atlantic Provinces Economic Council recently issued a
report called The Importance of Federal Transfers to Atlantic Canada.
They estimated that the new rule limiting a province's fiscal capacity to that
of the average of all equalization-receiving provinces — that rule alone cost
my province of Nova Scotia $227 million in equalization payments in 2012-13 —
about 18 per cent of its actual equalization payments or almost 20 per cent,
one-fifth. That is a very significant reduction in revenue and therefore a very
significant impact on the ability of my province to provide for Nova Scotian
families.

Over the last five years, the fiscal capacity cap and the GDP cap cost Nova
Scotia $1.7 billion. That is more than Nova Scotia received in equalization last
year. In other words, Nova Scotia has lost more than a year of payments in just
five years. This loss was mitigated by other payments, the Total Transfer
Protection provision, and the Cumulative Best-Of Guarantee payments that arose
out of the offshore oil accords. But the Best-Of Guarantee payments will expire
and the government suddenly announced two months ago that it will not renew the
Total Transfer Protection. So those mitigating payments will not be there moving
forward.

APEC reported that "equalization payments in the current program are
insufficient to bring all equalization-receiving provinces up to the national
average per capita fiscal capacity."

And the result, colleagues? Instead of equalization having "equalized" or
smoothed out inequalities in provincial fiscal capacity across Canada, we now
face very large disparities amongst the provinces. In 2012-13, Nova Scotia's
equalization payments brought it up to 93 per cent of the national average per
capita fiscal capacity. This may be contrasted to Alberta, whose per capita
fiscal capacity was 51 per cent higher than the national average. There is a
disparity of almost 60 percentage points in the ability of these provinces to
provide for Canadians — and that is after equalization. Is this the vision that
Canadians have for our country, ever greater disparity between regions and
between Canadians?

The Canada Health Transfer and the Canada Social Transfer have also seen very
significant changes. The CST is the federal transfer that provides
post-secondary education funding — and I think all of us in this chamber agree
that post-secondary education is becoming ever-more critical as we seek to
position young Canadians to meet the challenges of the 21st century.

The CHT is the federal contribution to Canadians' health care. Just as health
care costs are the single largest item in provincial budgets, so the CHT is the
largest federal transfer payment. In 2014-15, the CHT totalled $32 billion for
the 10 provinces.

Until the recent changes, both the CST and the CHT consisted of a cash
transfer, a tax point transfer and what was called "associated equalization." I
will explain.

The tax point transfer dates back to 1977, when the federal government agreed
to transfer tax room from its federal income taxes over to the provinces to help
them fund health care and post-secondary education. The value of a tax point, of
course, is different from province to province because different provinces have
different levels of economic activity. So a tax point in a more prosperous
province will be worth significantly more than one in a less prosperous
province. Accordingly, the federal government quite sensibly agreed to
"equalize" the value of these tax points by province, on an on-going basis. This
has been known as "associated equalization."

(1740)

In 2007, the federal government announced that both the CST and the CHT would
move to so-called equal per capita funding. There would be no more associated
equalization; and the cash transfer would be made on an equal per capita basis.
This came into effect in 2007-08 for the CST; it will come into effect this
year, 2014-15, for the CHT.

To give you an idea of the magnitude of this change, it was estimated that if
the change to equal per capita CHT cash had been implemented in 2011-12,
Alberta's cash transfers would have increased by $850 million — while every
other province would have seen a decline in its share. Newfoundland and
Labrador's cash transfer would have been reduced by $55 million. The three
Maritime provinces would have seen a combined reduction of $42 million. So these
are the kinds of changes we will be seeing in the years ahead as the per capita
CHT rule kicks in. It is true that total CHT payments increase annually with the
escalator, and that the actual cash payments received by the Atlantic provinces
will increase, but those increases will not be as much as they would have been
without this change — and not as much as the provinces need.

Let me read an excerpt from the APEC report:

While equal per capita cash sounds fair in principle, it does not
recognize differences in the per capita cost of providing health care, which
may be larger in a province with a more widely dispersed population.
Similarly, the per capita demand for health care may vary with demographic
characteristics. As annual health care costs increase with age, a province
such as Nova Scotia which has a higher percentage of seniors will tend to
have above average per capita health care costs. Finally, more prosperous
provinces have a greater capacity to raise revenues to fund public services.

This last point, of course, is what the former "associated equalization" was
specifically designed to both recognize and counter-balance. That is now gone.
There is in effect a double strike for provinces like my home province of Nova
Scotia and for the Canadians who live there.

That is not the only change. In 2017-18, the government will shift the growth
rate of the total CHT cash transfer from the current 6 per cent escalator to one
based on a three-year moving average of nominal GDP growth, with a guaranteed
annual minimum increase of 3 per cent. This new formula was unilaterally imposed
by the Harper government with no consultation with the provinces.

Our Parliamentary Budget Office looked at the numbers. They concluded that
under this formula, CHT will grow by only 3.9 per cent per year on average over
the period 2017-18 to 2024-25. Colleagues, that is more than 2 percentage points
below the current escalation — and we all know the pressures on our health care
system under the current funding structure, which of course are expected to
grow, not diminish, given the health care needs of our aging population. Indeed,
the PBO estimates that health care spending will grow by 5.1 per cent per year
between 2017-18 and 2024-25 — more than one percentage point higher than the
anticipated annual increase in CHT payments.

The Council of the Federation estimated that the escalator change alone will
reduce total CHT payments by $25 billion over the next 10 years. APEC calculated
that for my region, the Atlantic provinces, the total impact of the two changes
— the change to per capita funding and the reduced escalator — will result in
$2.5 billion in lost health care funding over the next decade.

To put this in perspective, provincial health care spending in the Atlantic
provinces grew at an average rate of 7 per cent annually between 2007-08 and
2011-12. As APEC observed, that is well above the 4.7 per cent annual increase
in the region's CHT payments.

Let me read to you again from the APEC report:

Although the CHT currently accounts for about 20 per cent of health care
spending in the Atlantic region, the slower growth rate in the CHT will
force the Atlantic provinces to make some difficult choices. These include
diverting an even greater share of their current revenues from other
programs into health care; reducing health care services; or finding other
ways to curtail increases in their health care costs. While the growth in
Atlantic health care spending has fallen to an average growth rate of 0.9
per cent in the last two fiscal years, it is not clear that such restraint
can be maintained indefinitely. Finding innovative ways to improve
efficiency and boost productivity will be important, but in the context of a
rapidly aging population, and with wages the largest single expense in the
health care system, such measures may do little to restrain the growing
demand for health care and the ever-rising cost to provide it.

But I must be clear. We did not do this on the backs of ordinary
Canadians or Canadians in need.... We did not cut the programs Canadians
rely on. We did not cut transfers to our provinces and territories — money
they use for things like education and health care.

Colleagues, take a look at the numbers. Read the analyses from respected
individuals and organizations. It is difficult to agree with Minister Flaherty.
I believe Canadians will find it difficult to agree with him as to the impact
that these changes have made.

I have focused my examples on the impact on my home province of Nova Scotia,
but others are equally concerned. Premier Robert Ghiz of Prince Edward Island
has spoken about the impact on P.E.I. of the changes to equalization. He called
it "a double whammy against a province like mine."

Ontario will lose $641 million because of the sudden cancellation of the
Total Transfer Protection payments, something of grave concern to that province.
Premier Kathleen Wynne was recently interviewed by Evan Solomon of CBC's The
House. Speaking of the cancellation of these payments, she said:

I just don't think it's right. I think it's not fair. And, in the case of
$641 million, had the federal government followed the pattern of the last
few years with other provinces, they would have flowed that $641 million.
And remember, we are net contributors to Confederation.

In 2012, Manitoba's then-Finance Minister Stan Struthers commented as follows
on the Harper government's move to per capita funding for the CHT while capping
equalization payments:

Every province contributes to the federal government's pot of money for
transfer payments, and every province, including Alberta, receives money
from the transfer payments pot of money. Every one of us. And every one of
us at one time or another collected equalization money, including Alberta.
So we all pay in and we all — every province — receive money from transfer
payments. So when you cap one side and leave the other side to rise through
per capita, that... is an upside-down transfer of funds within our
Confederation.

Joe Ruggeri, who held the Vaughan Chair in Regional Economics and was
Director of the Policy Studies Centre at the University of New Brunswick, wrote
a paper in 2007 on the impact of Budget 2007 on federal transfer payments. He
entitled it, Them That Has, Gets. It was published by the Caledon
Institute.

That institute published another paper more recently, in October 2012, by
Michael Mendelson, entitled, Is Canada (still) a fiscal union? His
conclusion:

Canada is no longer a practising fiscal union, at least in respect of
using fiscal federalism to mitigate fiscal imbalance.

He traced the problems back to the late 1990s, when, in his words, "equity
fell off a cliff and has not bounced back."

Mendelson believes the problem relates to the imbalance in our fiscal
federalism caused by natural resource revenues. He is not alone. In the 2012
interview with Frances Russell of the Winnipeg Free Press, Manitoba's
then-Finance Minister Struthers also pointed out that the purpose of Canada's
constitutionally entrenched equalization program is to ensure that all
Canadians, wherever they live, can count on comparable public services at
comparable tax rates.

(1750)

But the changes presented by the Harper government, Minister Struthers said:

... really turns that upside down. It really puts a lot of pressure on
provinces like Manitoba to be able to offer our citizens health services and
the rest without going through the roof on the taxes side simply because we
don't live in a province that's rich in oil and gas and potash.

All the provinces that lack non-renewable resources are going to be
hurt... Meanwhile, the three resource-rich provinces whose economies are
booming — two of whom, Alberta and Saskatchewan, hovered at or near
bankruptcy during the Great Depression of the 1930s and had to be bailed out
by Ottawa — will be better off.

Colleagues, we all know that Prime Minister Harper and his government are
laser-focused on developing the resource economy of this country. However, as
natural resources assume an ever larger part of our national economy, the
implications cannot be ignored.

Similarly, it is simply wrong to reduce Canada Health Transfer payments while
ignoring the impact of these reductions ignoring the fact that provinces have
aging populations whose demands on the health care system will increase, not
diminish in the years to come.

As a nation, we have an obligation to consider and address these questions
together. I have been troubled to see the federal government refuse to discuss
these matters with its constitutional partners, the provinces — the parties
directly impacted by these decisions. Instead, the federal government chose to
make decisions behind closed doors and then unilaterally imposed them on the
provinces, with no opportunity for the provinces to explain the impact these
decisions will actually have on Canadians. For a program that is all about
strengthening national cohesion, that's a very strange way to proceed. Instead
of cooperative federalism, I fear we now have confrontational federalism.

Equalization and the other federal transfers are a crucial part of our
national fabric. At the national level, equalization has strengthened and
unified Canada economically. Canadians can pursue educational and business
opportunities across the country without having to accept inferior public
services or pay oppressive taxes. Equalization has meant that provinces can
compete for workers on a level playing field without worrying that they will
lose much needed labour because of the attraction of better public services
provided elsewhere. Ontario students can study at Nova Scotia's top-rated
universities and receive the same quality of public services as at home. Young
New Brunswickers can fill labour shortages in Alberta without leaving their
aging parents to depend on a system stripped of their tax dollars. In short,
every province can fairly compete for innovators, investors and workers without
cutting public services or hiking taxes. In this way, equalization has
encouraged interprovincial mobility with carrots rather than sticks, with
rewards rather than risks. In today's dynamic economy, this mobility enhances
fair competition and national prosperity. We all win.

Colleagues, Canadians are more than competitors in a supply and demand
marketplace. We are more than consumers, more than taxpayers. We are citizens
living together in a nation built on certain principles and shared values, one
of which is that all Canadians, wherever they live and whatever the current ebb
and flow of regional economic prosperity, have access to a basic standard of
quality public services. End of story. That, fundamentally, is why we have
constitutionalized the principle of equalization in the Canadian social
contract. That's why the future of the equalization program must consist of
better honouring the principles that underscore and that gave birth to
equalization.

Colleagues, equalization has been a vital part of our past, building Canada
to be the nation it is.

As a senator from Atlantic Canada, I know very concretely the crucial role
equalization plays in the lives of Canadians of my region. As a student of
history, knowing that prosperity is rarely a constant and that regions that are
prosperous today may be less so tomorrow, I believe that there will be a place
for equalization in our future. Different regions play different roles at
different times, colleagues. At Confederation, my region, the Maritimes, was an
economic powerhouse. It was strong in the resource sector, yes, but we also had
a dynamic and growing financial sector. The Bank of Nova Scotia and the Royal
Bank were first established there, along with major insurance companies. We had
strong steel, iron and textile sectors, as well as shipbuilding. And, in 1890,
24 per cent of Canada's manufacturing businesses were in the Maritimes.

Some say we sacrificed our regional interests to build a stronger nation.
Instead of selling our products and resources to the northeastern states, we
shipped them across Canada for use here. The Canadian economy grew and
strengthened — and Maritimers have been proud to know that they — we — are
Atlantic Canadians. That's what being part of a nation is all about. Certainly,
it is what being Canadian has been and is all about.

Colleagues, I look forward to this debate and to hearing contributions from
senators from all regions, wherever they sit in this chamber. I chose my words
carefully in these remarks. This is not and should not be a partisan debate.
It's a discussion about how we represent the people of our regions today and
looking to the future. It's about what sort of Canada we envision for our
children and grandchildren.

I hope this is the first of many debates in this chamber, taking on important
public policy issues that directly impact the regions we represent — and doing
so with respect for each other's views and ideas. All of us here share a deep
commitment to our provinces and to Canada. We have an opportunity, colleagues.
Sitting in this place, we are uniquely positioned to give voice to the people of
our regions, and to take on important issues — like equalization — that are not
being debated elsewhere.

My motion asks that we establish a special committee on equalization and
fiscal federalism, so that we can take a serious look at the state of our fiscal
union, at the ability of our provinces to provide for all Canadians, from coast
to coast to coast, so that we can engage with experts, provincial leaders and
Canadians on this critically important aspect of our Confederation.

As I said at the beginning of these remarks, equalization is all about the
kind of nation we are and what kind of nation we're building for the future, and
that is not something that should ever be decided behind closed doors.

That the Standing Senate Committee on Energy, the Environment and Natural
Resources be authorized to examine and report on non-renewable and renewable
energy development including energy storage, distribution, transmission,
consumption and other emerging technologies in Canada's three northern
territories. In particular, the committee shall be authorized to:

Identify energy challenges facing northern territories including the
state of existing energy services and infrastructure assets as well as
related economic, social, geographic and environmental challenges;

Identify existing federal and territorial programs and measures aimed
at improving energy use and supply in the north;

Examine ways of enhancing and diversifying energy production for
domestic needs and export markets; and

Examine ways of improving the affordability, availability,
reliability and efficiency of energy use for industries, businesses,
governments, and residents in the north.

That the committee submit its final report no later than December 31,
2014 and that the committee retain all powers necessary to publicize its
findings until 180 days after the tabling of the final report.

(1800)

An Hon. Senator: Question.

The Hon. the Speaker pro tempore: Are honourable
senators ready for the question?

Hon. Senators: Question.

Hon. Joan Fraser (Deputy Leader of the Opposition): I have a question
for Senator Neufeld, Your Honour.

Briefly, sir, could you give us some indication of what the work plan would
be here, how elaborate the work will be and whether travel is involved?

Senator Neufeld: Yes, travel will be involved to the three northern
territories, that is, Yukon, Northwest Territories and Nunavut, mainly to the
capitals but to some other regions of the North to actually review the things
that the Speaker just read out.

We need to present this to the Internal Economy Committee by March 7, which
is coming fairly quickly, so that, if we can, we can get approval for those
costs. We're working on that as we speak.

[Translation]

The Hon. the Speaker pro tempore: Honourable senators,
before we continue debate, it being six o'clock, I am obliged by rule 3-3(1) to
leave the chair until eight o'clock unless honourable senators agree not to see
the clock.

Is it your pleasure, honourable senators, not to see the clock?

Some Hon. Senators: Agreed.

The Hon. the Speaker pro tempore: Agreed.

Do you have any more questions, Senator Fraser?

Senator Fraser: No, thank you, Mr. Speaker. I have a better
understanding of what it was about.

That he will call the attention of the Senate to the safety of
hydrocarbon transportation in Canada, and in particular, to the twelfth
report of the Standing Senate Committee on Energy, the Environment and
Natural Resources entitled: Moving Energy Safely: A Study of the Safe
Transport of Hydrocarbons by Pipelines, Tankers and Railcars in Canada,
deposited with the Clerk of the Senate on August 22nd, 2013,
during the First Session of the Forty-first Parliament.

He said: Honourable senators, I rise today to call the attention of this
chamber to the safety of hydrocarbon transportation in Canada and, in
particular, to the twelfth report of the Standing Senate Committee on Energy,
the Environment and Natural Resources, entitled Moving Energy Safely: A Study
of the Safe Transport of Hydrocarbons by Pipelines, Tankers and Railcars in
Canada. This report was deposited with the Clerk of the Senate on August 22,
2013, during the First Session of the Forty-first Parliament.

In the course of the nine-month study, the committee held 18 hearings in
Ottawa and heard from over 50 witnesses. We met with a range of stakeholders and
organizations, and conducted site visits in Calgary, Sarnia, Hamilton, Saint
John, Point Tupper, Halifax, Dartmouth, Vancouver, Blaine and Seattle,
Washington, and Valdez and Anchorage, Alaska.

With so much attention on high-profile oil and gas projects, including
potentially huge nation-building projects in my home province of British
Columbia, we knew our study was timely. In fact, we set a very ambitious
completion date for ourselves.

We knew, for example, that our report had to be released before the final
report by the Joint Review Panel on the Enbridge Northern Gateway Project and
the government's subsequent decision on the project. Of course, the Joint Review
Panel has issued its final report now and has recommended that the pipeline be
approved with 209 conditions, because Canadians will be better off with this
project than without it.

The committee also knew that when the government announced measures toward
the creation of a world-class tanker safety system in March 2013, including a
review by the Tanker Safety Expert Panel, we wanted our report — and the work of
our committee — to prove of value to their process.

However, honourable senators, what we did not anticipate was the terrible
tragedy in Lac-Mégantic, Quebec, on July 6, 2013. This horrific accident claimed
47 lives and left a community in ruins.

It also thrust the issue of hydrocarbon transportation into the spotlight in
a way that we never imagined. I can tell you that our committee members had many
thoughtful discussions as we grappled with how to reconcile what we learned over
the course of the study with that devastating event.

From the report, I'm going to read a couple of recommendations in regard to
rail safety that we made, understanding that there were still lots of
investigations going on with what happened in Lac-Mégantic. I read verbatim:

10. That the federal government initiate a major arm's-length review of
the country's railway regulatory framework, standards and industry practices
to meaningfully advance the safe transportation of dangerous goods by rail
in Canada....

13. That Transport Canada apply appropriate minimum liability coverage
thresholds to ensure rail companies have the financial capacity to cover
damages caused by a major incident.

I am proud to say that those things are being discussed and worked on as we
speak. Another recommendation states:

11. That Transport Canada review, in cooperation with the United States
Department of Transportation, the use of CTC-111A and DOT-111 tank cars and
consider accelerating the transition to the revised standard.

In fact, that was supported just recently, in mid-February, by Hunter
Harrison, the current CEO of Canadian Pacific and previous CEO of Canadian
National, when he said that thousands of older-model tank cars currently hauling
crude oil on North American railways must be retrofitted or retired immediately.
That's a strong statement from someone who is in charge of that large company.

At the end of the day, I'm confident that our report provided both a valuable
overview and clear recommendations that have made a meaningful contribution to
the public discourse. I would like to thank the deputy chair, Senator Grant
Mitchell, and all committee members for their hard work and commitment to
meeting our deadlines during the summer break.

The reality is, honourable senators, that we are dependent on oil and gas and
the many products and comforts that we derive from these resources: energy to
fuel our vehicles and heat our homes, but also daily staples like shampoo, soap,
clothing, toys, and even aspirins and vitamin capsules.

Let us also remember that the energy sector is an important economic
generator in this country. According to Natural Resources Canada, in 2012,
energy industries accounted for $155 billion — over 9 per cent of total Canadian
gross domestic product. In fact, it ranks in the top three sectors, behind
manufacturing, real estate, and rental and leasing.

It might also interest honourable senators to know that there are 369 oil and
gas companies listed on the Toronto Stock Exchange and the TSX Venture Exchange,
with a total market capitalization of $376 billion. In 2013, the equity capital
raised by these companies was $5.2 billion, and $204 billion in oil and gas
company stocks was traded.

The industry's impact on employment is also significant. More than 335,000
direct jobs, including 3,800 self-employed positions. Additionally, there are
another 161,000 indirect jobs in the electric power and oil and gas engineering
construction industries.

Globally, Canada is also an important player, ranking fifth in the world in
crude oil production. In 2012, we produced 3.3 million barrels per day; of
these, we exported 2.3 million. Virtually all of our crude oil — 99 per cent —
is exported to the United States.

(1810)

In light of the increase in oil and gas production in recent years and the
expected future growth, our transportation needs across all modes are great. The
committee learned, for example, that Canadian National Railway and Canadian
Pacific expected to move 140,000 carloads of crude oil in 2013, a dramatic
increase from 500 carloads in 2009. In my view, the point underscored the
importance of ensuring — as our transportation systems expand to meet the
demands of growing production — that regulations are carefully designed so as to
protect the public, workers and the environment.

Currently, our maximum pipeline capacity out of western Canada is 3.5 million
barrels per day. Production is expected to grow in the years ahead. To meet this
expected demand, several large pipelines are being proposed: TransCanada
Keystone XL Pipeline with a capacity for 830 barrels per day; the Enbridge
Northern Gateway Pipeline with a capacity of 525,000 barrels per day; and Kinder
Morgan Trans Mountain Pipeline, which is seeking to increase its capacity from
300,000 to 890,000 barrels per day to U.S. and overseas markets.

It was in this context that your committee undertook its study. From the
outset, the committee decided that the purpose of this study was not to rank the
modes nor to determine if there was a safest way to transport product. Rather,
we were committed to examining the current state of emergency and spill
prevention, preparedness, safety, and response programs for rail, pipelines and
tankers.

Overall, the committee found that, for the most part, hydrocarbons are moved
safely in Canada. In 2012, 1.2 billion barrels of crude were moved on Canada's
federally regulated pipeline system; that is, on those pipelines that cross a
provincial or international border. According to the data on this system, from
2000 to 2011, 99.9996 per cent of crude and petroleum products were moved
without a spill.

The data on the rail system prior to the Lac-Mégantic accident are similarly
impressive: 99.9 per cent of the millions of carloads of dangerous goods that
are moved each year are delivered without incident. In fact, the committee
learned that from 2003 to 2012, train accidents in Canada had actually declined
by 25 per cent and main track derailments decreased by 60 per cent. More
specifically, in terms of the number of accidents involving dangerous goods,
there was a 48 per cent decline over the same period.

It's important to note that, on the tanker side, there have been no major
spills in Canada for decades. The only major tanker spill in Canada happened off
the coast of Nova Scotia in 1988 when an explosion aboard the Odyssey
resulted in a spill of 132,000 tonnes of crude oil.

In global terms, the most recent major spill took place in South Korea in
2007. That event occurred when the tanker Hebei Spirit was hit by a barge
while anchored and leaked 11,000 tonnes of crude oil. Overall, international
statistics show that 19 of the world's 20 largest oil spills took place before
the year 2000.

The reality is that the last two decades have seen an increase in seaborne
oil trade; yet, despite this, there has been a significant decrease in the
number of tanker spills.

To investigate this issue further, the committee travelled to Alaska to meet
with officials and see first-hand the lessons learned from the Exxon Valdez
disaster. Honourable senators will recall the grounding of the Exxon
Valdez in March 1989 when 44,000 tonnes of oil — about one fifth of its
cargo — was released off the coast of Alaska.

This event had a profound impact on the shipping industry worldwide and led
to many positive improvements in tanker safety. In fact, U.S. officials told the
committee that the volume of spills over the past decade could be measured in
teaspoons.

In this country, a review following that disaster resulted in a significant
revamping of the marine spill prevention, preparedness and response approach
used in Canada. Under MARPOL, the International Convention for the Prevention of
Pollution from Ships, and the Canada Shipping Act, 2001, large crude oil tankers
operating in Canadian waters are required to be double-hulled. This has been the
requirement for large tankers — for example, those over 5,000 deadweight tonnes
— since 2010. Starting in 2015, all smaller tankers will also be required to
have double hulls.

Over the course of the committee's study, a range of testimony revealed two
key concepts that are fundamental to achieving the results in safety outcomes.
It seemed to us that witness after witness emphasized the importance of building
social licence and creating a culture of safety. "Social licence" can be defined
as "the broad approval by society for a given activity or project."

Brenda Kenny, President and CEO of the Canadian Energy Pipeline Association,
suggested that in this day and age it is not enough to obtain a regulatory
licence or permit in order to proceed with energy projects. Rather, there must
be:

... an understanding that public safety is much more than an engineering
challenge; it also involves creating an overall sense of security and
confidence in the operation of facilities and the institutions that regulate
them.

This means that in order to earn the social licence to build and operate
energy systems, you need a robust safety system with a clear focus on the
environment, transparency, early consultation and continued community
engagement. This can also mean going beyond regulated requirements in order to
address community concerns.

Of course, all of this is about building trust with stakeholders. As Al
Ritchie, Vice-President of Operations for Spectra Energy Transmission West,
explained to the committee:

... to ensure we have that trust, we work hard to be transparent, to
explain to the communities what we are doing and why we are doing it.

Regulators also play an important role in building public trust. Today,
perhaps more than ever, the National Energy Board and Transport Canada are well
known and visible to the public. They have a valuable role to play, especially
in communicating clearly with the public in a transparent and efficient way.
Indeed, it is the view of the committee that the information on the types of
products released and the reasons for the incident should be made publicly
available in a timely and accessible manner.

Transportation operations, including equipment and assets, are subject to
regulatory requirements. All companies also have safety policies and procedures
in place to prevent accidents; this includes everything from safety protocols,
personal safety equipment, inspection and monitoring programs, to equipment
standards, training, supervision and so on.

While regulations are a very important component, they are only one part of
the safety equation. The committee learned that it is also vitally important to
analyze and understand the nature of accidents. Ultimately, it is this
information and understanding that enables transportation systems to develop
effective measures to address weaknesses and reduce accidents.

Honourable senators, this is where safety culture comes into play. "Safety
culture" refers to the shared values and beliefs that interact with an
organization's structures and management systems to produce certain behaviours.
Throughout the study, I was pleased to find many witnesses emphasize the
importance of fostering a strong safety culture. Witnesses told us that one of
the guiding principles was that every worker clearly understands that safety is
the top priority and that safety is embedded in the approach to all activities;
it is not a separate consideration.

We were told by senior executives that organizations investigate all lapses
and encourage employees to report errors. We were even told that employees were
empowered to immediately stop an operation if they perceived any threat to
safety.

The Hon. the Speaker pro tempore: Honourable senator, do
you need more time to finish your remarks?

Senator Neufeld: Five minutes.

The Hon. the Speaker pro tempore: Do honourable senators
agree?

Hon. Senators: Agreed.

The Hon. the Speaker pro tempore: Let's take it five
minutes by five minutes.

Senator Neufeld: Thank you, Your Honour.

It was especially impressive to stand on the floor of control rooms at
various sites and have front-line workers tell us the same and share their
stories with us. It was clear to us that, although a culture of safety may start
at the top of an organization, its strength lies at the lower and middle levels.

Ultimately, honourable senators, the committee produced a concise 45-page
report that was both timely and well-received. We offered 13 strong
recommendations that addressed issues across all three modes, with implications
for regulators, industry, government departments and agencies. I would like to
take a moment to highlight some of the committee's accomplishments in this
regard.

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Our press conference was carried live on national news stations and was
widely reported in national and local print and, of course, online media. In
fact, our report was even picked up internationally and appeared, for example,
on foxnews.com.

I'm also aware that the report was well-received by industry. I have been
told that a top executive at British Petroleum insisted that it be distributed
across the company and be required reading.

The Canadian Energy Pipeline Association supported, in principle, the
committee's call for improved public access to oil spill information. They also
cited the importance of increased public transparency through industry-wide
performance tracking and reporting.

The National Energy Board, the federal regulator for pipelines, also
commented in the media that it agreed with our recommendations and pointed out
that it is developing a "safety culture framework."

More recently, the committee's work was acknowledged and supported in the
report of the Tanker Safety Expert Panel. In their report, A Review of
Canada's Ship-Source Oil Spill Preparedness and Response Regime — Setting the
Course for the Future, they write:

Furthermore, we support the recommendations made by the Standing Senate
Committee on Energy, the Environment and Natural Resources in its report...
to enhance transparency in the Regime by making information on spills
available to the public.

Honourable senators, no activity is risk free, but while there is risk in
everything, we are empowered to make informed, intelligent choices that mitigate
those risks.

In the case of the transportation of hydrocarbons, we need to ensure and
trust that our transportation systems, and the institutions that regulate them,
are focused on keeping the public safe and the environment free from harm.

Personally, I have great confidence in the systems we have in place in
Canada, and frankly, what we learned during this study only strengthened this.
However, as many witnesses emphasized to us, there is no room for complacency.
We must continue to strive to find new ways, as technology improves, to refine
existing processes and training.

As we were told throughout the study, there must be an atmosphere of
continuous learning and understanding about why accidents occur. Above all,
organizations must have a preoccupation with failure — both understanding it and
how to prevent it.

Honourable senators, I am pleased to see that government officials,
regulators and industry players at every level are seized with this
preoccupation. With these systems in place, the health and safety of Canadians
and our environment are in good hands.